Correlation Between Cloud Air and Samsung Biologics
Can any of the company-specific risk be diversified away by investing in both Cloud Air and Samsung Biologics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cloud Air and Samsung Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cloud Air CoLtd and Samsung Biologics Co, you can compare the effects of market volatilities on Cloud Air and Samsung Biologics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cloud Air with a short position of Samsung Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloud Air and Samsung Biologics.
Diversification Opportunities for Cloud Air and Samsung Biologics
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cloud and Samsung is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Cloud Air CoLtd and Samsung Biologics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Biologics and Cloud Air is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cloud Air CoLtd are associated (or correlated) with Samsung Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Biologics has no effect on the direction of Cloud Air i.e., Cloud Air and Samsung Biologics go up and down completely randomly.
Pair Corralation between Cloud Air and Samsung Biologics
Assuming the 90 days trading horizon Cloud Air CoLtd is expected to generate 1.86 times more return on investment than Samsung Biologics. However, Cloud Air is 1.86 times more volatile than Samsung Biologics Co. It trades about 0.22 of its potential returns per unit of risk. Samsung Biologics Co is currently generating about 0.09 per unit of risk. If you would invest 75,800 in Cloud Air CoLtd on December 7, 2024 and sell it today you would earn a total of 19,100 from holding Cloud Air CoLtd or generate 25.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Cloud Air CoLtd vs. Samsung Biologics Co
Performance |
Timeline |
Cloud Air CoLtd |
Samsung Biologics |
Cloud Air and Samsung Biologics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cloud Air and Samsung Biologics
The main advantage of trading using opposite Cloud Air and Samsung Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloud Air position performs unexpectedly, Samsung Biologics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Samsung Biologics will offset losses from the drop in Samsung Biologics' long position.Cloud Air vs. Infinitt Healthcare Co | Cloud Air vs. Lotte Fine Chemical | Cloud Air vs. Samsung Publishing Co | Cloud Air vs. Kg Chemical |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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