Correlation Between Samil Enterprise and Yooshin Engineering
Can any of the company-specific risk be diversified away by investing in both Samil Enterprise and Yooshin Engineering 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 Samil Enterprise and Yooshin Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samil Enterprise Co and Yooshin Engineering, you can compare the effects of market volatilities on Samil Enterprise and Yooshin Engineering 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 Samil Enterprise with a short position of Yooshin Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samil Enterprise and Yooshin Engineering.
Diversification Opportunities for Samil Enterprise and Yooshin Engineering
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samil and Yooshin is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Samil Enterprise Co and Yooshin Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yooshin Engineering and Samil Enterprise 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 Samil Enterprise Co are associated (or correlated) with Yooshin Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yooshin Engineering has no effect on the direction of Samil Enterprise i.e., Samil Enterprise and Yooshin Engineering go up and down completely randomly.
Pair Corralation between Samil Enterprise and Yooshin Engineering
Assuming the 90 days trading horizon Samil Enterprise is expected to generate 1.08 times less return on investment than Yooshin Engineering. But when comparing it to its historical volatility, Samil Enterprise Co is 3.42 times less risky than Yooshin Engineering. It trades about 0.44 of its potential returns per unit of risk. Yooshin Engineering is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,265,000 in Yooshin Engineering on August 28, 2024 and sell it today you would earn a total of 225,000 from holding Yooshin Engineering or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samil Enterprise Co vs. Yooshin Engineering
Performance |
| Timeline |
| Samil Enterprise |
| Yooshin Engineering |
Samil Enterprise and Yooshin Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samil Enterprise and Yooshin Engineering
The main advantage of trading using opposite Samil Enterprise and Yooshin Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samil Enterprise position performs unexpectedly, Yooshin Engineering 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 Yooshin Engineering will offset losses from the drop in Yooshin Engineering's long position.| Samil Enterprise vs. Hanyang ENG Co | Samil Enterprise vs. Nam Hwa Construction | Samil Enterprise vs. KT Submarine Co | Samil Enterprise vs. Yooshin Engineering |
| Yooshin Engineering vs. Kukil Metal Co | Yooshin Engineering vs. Dongbang Transport Logistics | Yooshin Engineering vs. DONGKUK TED METAL | Yooshin Engineering vs. Lotte Chilsung Beverage |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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