Correlation Between Samsung Biologics and Mirai Semiconductors

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

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

Diversification Opportunities for Samsung Biologics and Mirai Semiconductors

0.62

Correlation Coefficient

Samsung Biologics  Mirai Semiconductors

Poor diversification

The 3 months correlation between Samsung and Mirai is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Biologics Co and Mirai Semiconductors Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirai Semiconductors and Samsung Biologics 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 Samsung Biologics Co are associated (or correlated) with Mirai Semiconductors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirai Semiconductors has no effect on the direction of Samsung Biologics i.e., Samsung Biologics and Mirai Semiconductors go up and down completely randomly.

Pair Corralation between Samsung Biologics and Mirai Semiconductors

Assuming the 90 days trading horizon Samsung Biologics is expected to generate 1.31 times less return on investment than Mirai Semiconductors. But when comparing it to its historical volatility, Samsung Biologics Co is 5.78 times less risky than Mirai Semiconductors. It trades about 0.15 of its potential returns per unit of risk. Mirai Semiconductors Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,084,000  in Mirai Semiconductors Co on December 29, 2024 and sell it today you would earn a total of  40,000  from holding Mirai Semiconductors Co or generate 3.69% return on investment over 90 days.

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

Samsung Biologics Co  vs.  Mirai Semiconductors Co

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 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Samsung Biologics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mirai Semiconductors

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mirai Semiconductors Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mirai Semiconductors may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Samsung Biologics and Mirai Semiconductors

The main advantage of trading using opposite Samsung Biologics and Mirai Semiconductors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Biologics position performs unexpectedly, Mirai Semiconductors 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 Mirai Semiconductors will offset losses from the drop in Mirai Semiconductors' long position.

The idea behind Samsung Biologics Co and Mirai Semiconductors 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.

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 Anywhere module to track or share privately all of your investments from the convenience of any device.