Correlation Between MedPacto and Samsung Biologics

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

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

Diversification Opportunities for MedPacto and Samsung Biologics

-0.33

Correlation Coefficient

MedPacto  Samsung Biologics

Very good diversification

The 3 months correlation between MedPacto and Samsung is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding MedPacto and Samsung Biologics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Biologics and MedPacto 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 MedPacto 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 MedPacto i.e., MedPacto and Samsung Biologics go up and down completely randomly.

Pair Corralation between MedPacto and Samsung Biologics

Assuming the 90 days trading horizon MedPacto is expected to under-perform the Samsung Biologics. In addition to that, MedPacto is 2.67 times more volatile than Samsung Biologics Co. It trades about -0.15 of its total potential returns per unit of risk. Samsung Biologics Co is currently generating about 0.09 per unit of volatility. If you would invest  93,800,000  in Samsung Biologics Co on November 20, 2024 and sell it today you would earn a total of  6,200,000  from holding Samsung Biologics Co or generate 6.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.28%
Values	Daily Returns

MedPacto  vs.  Samsung Biologics Co

MedPacto

Risk-Adjusted Performance

Very Weak

Over the last 90 days MedPacto has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Samsung Biologics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Biologics Co are ranked lower than 6 (%) 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 March 2025.

Pair Trading with MedPacto and Samsung Biologics

The main advantage of trading using opposite MedPacto and Samsung Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MedPacto 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 MedPacto 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.