Correlation Between Samyung Trading and Dongbang Transport
Can any of the company-specific risk be diversified away by investing in both Samyung Trading and Dongbang Transport 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 Samyung Trading and Dongbang Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samyung Trading Co and Dongbang Transport Logistics, you can compare the effects of market volatilities on Samyung Trading and Dongbang Transport 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 Samyung Trading with a short position of Dongbang Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samyung Trading and Dongbang Transport.
Diversification Opportunities for Samyung Trading and Dongbang Transport
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samyung and Dongbang is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Samyung Trading Co and Dongbang Transport Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbang Transport and Samyung Trading 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 Samyung Trading Co are associated (or correlated) with Dongbang Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbang Transport has no effect on the direction of Samyung Trading i.e., Samyung Trading and Dongbang Transport go up and down completely randomly.
Pair Corralation between Samyung Trading and Dongbang Transport
Assuming the 90 days trading horizon Samyung Trading Co is expected to under-perform the Dongbang Transport. But the stock apears to be less risky and, when comparing its historical volatility, Samyung Trading Co is 1.44 times less risky than Dongbang Transport. The stock trades about -0.37 of its potential returns per unit of risk. The Dongbang Transport Logistics is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 217,000 in Dongbang Transport Logistics on October 26, 2024 and sell it today you would earn a total of 9,000 from holding Dongbang Transport Logistics or generate 4.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samyung Trading Co vs. Dongbang Transport Logistics
Performance |
| Timeline |
| Samyung Trading |
| Dongbang Transport |
Samyung Trading and Dongbang Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samyung Trading and Dongbang Transport
The main advantage of trading using opposite Samyung Trading and Dongbang Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samyung Trading position performs unexpectedly, Dongbang Transport 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 Dongbang Transport will offset losses from the drop in Dongbang Transport's long position.| Samyung Trading vs. KB Financial Group | Samyung Trading vs. Shinhan Financial Group | Samyung Trading vs. Hana Financial | Samyung Trading vs. Woori Financial Group |
| Dongbang Transport vs. KB Financial Group | Dongbang Transport vs. Shinhan Financial Group | Dongbang Transport vs. Hana Financial | Dongbang Transport vs. Woori Financial Group |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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