Correlation Between OliX PharmaceuticalsI and Samsung Biologics

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

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

Diversification Opportunities for OliX PharmaceuticalsI and Samsung Biologics

0.81

Correlation Coefficient

OliX PharmaceuticalsI  Samsung Biologics

Very poor diversification

The 3 months correlation between OliX and Samsung is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding OliX PharmaceuticalsInc and Samsung Biologics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Biologics and OliX PharmaceuticalsI 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 OliX PharmaceuticalsInc 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 OliX PharmaceuticalsI i.e., OliX PharmaceuticalsI and Samsung Biologics go up and down completely randomly.

Pair Corralation between OliX PharmaceuticalsI and Samsung Biologics

Assuming the 90 days trading horizon OliX PharmaceuticalsInc is expected to generate 2.87 times more return on investment than Samsung Biologics. However, OliX PharmaceuticalsI is 2.87 times more volatile than Samsung Biologics Co. It trades about 0.05 of its potential returns per unit of risk. Samsung Biologics Co is currently generating about 0.11 per unit of risk. If you would invest  1,474,000  in OliX PharmaceuticalsInc on July 6, 2024 and sell it today you would earn a total of  259,000  from holding OliX PharmaceuticalsInc or generate 17.57% return on investment over 90 days.

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

OliX PharmaceuticalsInc  vs.  Samsung Biologics Co

OliX PharmaceuticalsInc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in OliX PharmaceuticalsInc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, OliX PharmaceuticalsI sustained solid returns over the last few months and may actually be approaching a breakup point.

Samsung Biologics

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Biologics Co are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samsung Biologics sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OliX PharmaceuticalsI and Samsung Biologics

The main advantage of trading using opposite OliX PharmaceuticalsI and Samsung Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OliX PharmaceuticalsI 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 OliX PharmaceuticalsInc 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.