Correlation Between Samyung Trading and Settlebank
Can any of the company-specific risk be diversified away by investing in both Samyung Trading and Settlebank 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 Settlebank 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 Settlebank, you can compare the effects of market volatilities on Samyung Trading and Settlebank 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 Settlebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samyung Trading and Settlebank.
Diversification Opportunities for Samyung Trading and Settlebank
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samyung and Settlebank is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Samyung Trading Co and Settlebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Settlebank 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 Settlebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Settlebank has no effect on the direction of Samyung Trading i.e., Samyung Trading and Settlebank go up and down completely randomly.
Pair Corralation between Samyung Trading and Settlebank
Assuming the 90 days trading horizon Samyung Trading Co is expected to generate 0.22 times more return on investment than Settlebank. However, Samyung Trading Co is 4.49 times less risky than Settlebank. It trades about 0.06 of its potential returns per unit of risk. Settlebank is currently generating about -0.07 per unit of risk. If you would invest 1,267,000 in Samyung Trading Co on September 12, 2024 and sell it today you would earn a total of 26,000 from holding Samyung Trading Co or generate 2.05% 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. Settlebank
Performance |
| Timeline |
| Samyung Trading |
| Settlebank |
Samyung Trading and Settlebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samyung Trading and Settlebank
The main advantage of trading using opposite Samyung Trading and Settlebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samyung Trading position performs unexpectedly, Settlebank 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 Settlebank will offset losses from the drop in Settlebank's long position.| Samyung Trading vs. Samsung Electronics Co | Samyung Trading vs. Samsung Electronics Co | Samyung Trading vs. SK Hynix | Samyung Trading vs. POSCO Holdings |
| Settlebank vs. Daishin Information Communications | Settlebank vs. Solution Advanced Technology | Settlebank vs. Busan Industrial Co | Settlebank vs. Busan Ind |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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