Correlation Between Samhwa Paint and Samyang Foods
Can any of the company-specific risk be diversified away by investing in both Samhwa Paint and Samyang Foods 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 Samhwa Paint and Samyang Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samhwa Paint Industrial and Samyang Foods Co, you can compare the effects of market volatilities on Samhwa Paint and Samyang Foods 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 Samhwa Paint with a short position of Samyang Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samhwa Paint and Samyang Foods.
Diversification Opportunities for Samhwa Paint and Samyang Foods
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samhwa and Samyang is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Samhwa Paint Industrial and Samyang Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samyang Foods and Samhwa Paint 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 Samhwa Paint Industrial are associated (or correlated) with Samyang Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samyang Foods has no effect on the direction of Samhwa Paint i.e., Samhwa Paint and Samyang Foods go up and down completely randomly.
Pair Corralation between Samhwa Paint and Samyang Foods
Assuming the 90 days trading horizon Samhwa Paint is expected to generate 26.47 times less return on investment than Samyang Foods. But when comparing it to its historical volatility, Samhwa Paint Industrial is 1.45 times less risky than Samyang Foods. It trades about 0.02 of its potential returns per unit of risk. Samyang Foods Co is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 53,500,000 in Samyang Foods Co on September 21, 2024 and sell it today you would earn a total of 21,500,000 from holding Samyang Foods Co or generate 40.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samhwa Paint Industrial vs. Samyang Foods Co
Performance |
| Timeline |
| Samhwa Paint Industrial |
| Samyang Foods |
Samhwa Paint and Samyang Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samhwa Paint and Samyang Foods
The main advantage of trading using opposite Samhwa Paint and Samyang Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samhwa Paint position performs unexpectedly, Samyang Foods 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 Samyang Foods will offset losses from the drop in Samyang Foods' long position.| Samhwa Paint vs. Samsung Electronics Co | Samhwa Paint vs. Samsung Electronics Co | Samhwa Paint vs. SK Hynix | Samhwa Paint vs. POSCO Holdings |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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