Correlation Between Samyung Trading and Han Kook
Can any of the company-specific risk be diversified away by investing in both Samyung Trading and Han Kook 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 Han Kook 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 Han Kook Steel, you can compare the effects of market volatilities on Samyung Trading and Han Kook 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 Han Kook. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samyung Trading and Han Kook.
Diversification Opportunities for Samyung Trading and Han Kook
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samyung and Han is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Samyung Trading Co and Han Kook Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Han Kook Steel 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 Han Kook. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Han Kook Steel has no effect on the direction of Samyung Trading i.e., Samyung Trading and Han Kook go up and down completely randomly.
Pair Corralation between Samyung Trading and Han Kook
Assuming the 90 days trading horizon Samyung Trading Co is expected to generate 0.28 times more return on investment than Han Kook. However, Samyung Trading Co is 3.56 times less risky than Han Kook. It trades about 0.01 of its potential returns per unit of risk. Han Kook Steel is currently generating about -0.03 per unit of risk. If you would invest 1,224,196 in Samyung Trading Co on November 6, 2024 and sell it today you would earn a total of 25,804 from holding Samyung Trading Co or generate 2.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samyung Trading Co vs. Han Kook Steel
Performance |
| Timeline |
| Samyung Trading |
| Han Kook Steel |
Samyung Trading and Han Kook Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samyung Trading and Han Kook
The main advantage of trading using opposite Samyung Trading and Han Kook positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samyung Trading position performs unexpectedly, Han Kook 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 Han Kook will offset losses from the drop in Han Kook's long position.| Samyung Trading vs. Puloon Technology | Samyung Trading vs. Ewon Comfortech Co | Samyung Trading vs. Nice Information Telecommunication | Samyung Trading vs. RFTech Co |
| Han Kook vs. Innowireless Co | Han Kook vs. Daesung Industrial Co | Han Kook vs. Industrial Bank | Han Kook vs. PJ Metal 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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