Correlation Between Kumho Industrial and Samyang Foods
Can any of the company-specific risk be diversified away by investing in both Kumho Industrial and Samyang Foods 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 Kumho Industrial and Samyang Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kumho Industrial Co and Samyang Foods Co, you can compare the effects of market volatilities on Kumho Industrial and Samyang Foods 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 Kumho Industrial with a short position of Samyang Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kumho Industrial and Samyang Foods.
Diversification Opportunities for Kumho Industrial and Samyang Foods
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kumho and Samyang is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Kumho Industrial Co and Samyang Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samyang Foods and Kumho Industrial 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 Kumho Industrial Co are associated (or correlated) with Samyang Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samyang Foods has no effect on the direction of Kumho Industrial i.e., Kumho Industrial and Samyang Foods go up and down completely randomly.
Pair Corralation between Kumho Industrial and Samyang Foods
Assuming the 90 days trading horizon Kumho Industrial Co is expected to under-perform the Samyang Foods. But the stock apears to be less risky and, when comparing its historical volatility, Kumho Industrial Co is 1.31 times less risky than Samyang Foods. The stock trades about -0.09 of its potential returns per unit of risk. The Samyang Foods Co is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 54,300,000 in Samyang Foods Co on September 30, 2024 and sell it today you would earn a total of 21,600,000 from holding Samyang Foods Co or generate 39.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kumho Industrial Co vs. Samyang Foods Co
Performance |
| Timeline |
| Kumho Industrial |
| Samyang Foods |
Kumho Industrial and Samyang Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kumho Industrial and Samyang Foods
The main advantage of trading using opposite Kumho Industrial and Samyang Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kumho Industrial position performs unexpectedly, Samyang Foods 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 Samyang Foods will offset losses from the drop in Samyang Foods' long position.| Kumho Industrial vs. AptaBio Therapeutics | Kumho Industrial vs. Wonbang Tech Co | Kumho Industrial vs. Busan Industrial Co | Kumho Industrial vs. Busan Ind |
| Samyang Foods vs. AptaBio Therapeutics | Samyang Foods vs. Wonbang Tech Co | Samyang Foods vs. Busan Industrial Co | Samyang Foods 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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