Correlation Between Nice Information and Samsung Biologics

Can any of the company-specific risk be diversified away by investing in both Nice Information 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 Nice Information and Samsung Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nice Information Telecommunication and Samsung Biologics Co, you can compare the effects of market volatilities on Nice Information 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 Nice Information with a short position of Samsung Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nice Information and Samsung Biologics.

Diversification Opportunities for Nice Information and Samsung Biologics

-0.61

Correlation Coefficient

Nice Information  Samsung Biologics

Excellent diversification

The 3 months correlation between Nice and Samsung is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Nice Information Telecommunica and Samsung Biologics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Biologics and Nice Information 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 Nice Information Telecommunication 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 Nice Information i.e., Nice Information and Samsung Biologics go up and down completely randomly.

Pair Corralation between Nice Information and Samsung Biologics

Assuming the 90 days trading horizon Nice Information Telecommunication is expected to under-perform the Samsung Biologics. In addition to that, Nice Information is 1.58 times more volatile than Samsung Biologics Co. It trades about -0.05 of its total potential returns per unit of risk. Samsung Biologics Co is currently generating about 0.18 per unit of volatility. If you would invest  93,700,000  in Samsung Biologics Co on December 25, 2024 and sell it today you would earn a total of  6,300,000  from holding Samsung Biologics Co or generate 6.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Nice Information Telecommunica  vs.  Samsung Biologics Co

Nice Information Tel

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nice Information Telecommunication has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Nice Information is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Samsung Biologics

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Biologics Co are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samsung Biologics may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Nice Information and Samsung Biologics

The main advantage of trading using opposite Nice Information and Samsung Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nice Information 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.

The idea behind Nice Information Telecommunication and Samsung Biologics Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.