Correlation Between Samick Musical and Sam Yang
Can any of the company-specific risk be diversified away by investing in both Samick Musical and Sam Yang 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 Samick Musical and Sam Yang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samick Musical Instruments and Sam Yang Foods, you can compare the effects of market volatilities on Samick Musical and Sam Yang 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 Samick Musical with a short position of Sam Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samick Musical and Sam Yang.
Diversification Opportunities for Samick Musical and Sam Yang
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samick and Sam is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Samick Musical Instruments and Sam Yang Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sam Yang Foods and Samick Musical 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 Samick Musical Instruments are associated (or correlated) with Sam Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sam Yang Foods has no effect on the direction of Samick Musical i.e., Samick Musical and Sam Yang go up and down completely randomly.
Pair Corralation between Samick Musical and Sam Yang
Assuming the 90 days trading horizon Samick Musical Instruments is expected to generate 1.2 times more return on investment than Sam Yang. However, Samick Musical is 1.2 times more volatile than Sam Yang Foods. It trades about 0.25 of its potential returns per unit of risk. Sam Yang Foods is currently generating about 0.27 per unit of risk. If you would invest 105,926 in Samick Musical Instruments on October 30, 2024 and sell it today you would earn a total of 44,174 from holding Samick Musical Instruments or generate 41.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samick Musical Instruments vs. Sam Yang Foods
Performance |
| Timeline |
| Samick Musical Instr |
| Sam Yang Foods |
Samick Musical and Sam Yang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samick Musical and Sam Yang
The main advantage of trading using opposite Samick Musical and Sam Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samick Musical position performs unexpectedly, Sam Yang 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 Sam Yang will offset losses from the drop in Sam Yang's long position.| Samick Musical vs. Digital Power Communications | Samick Musical vs. SH Energy Chemical | Samick Musical vs. Isu Chemical Co | Samick Musical vs. Seoul Electronics Telecom |
| Sam Yang vs. Wireless Power Amplifier | Sam Yang vs. TK Chemical | Sam Yang vs. Youl Chon Chemical | Sam Yang vs. Innowireless Co |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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