Correlation Between Sam Yang and Hanshin Construction
Can any of the company-specific risk be diversified away by investing in both Sam Yang and Hanshin Construction 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 Sam Yang and Hanshin Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sam Yang Foods and Hanshin Construction Co, you can compare the effects of market volatilities on Sam Yang and Hanshin Construction 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 Sam Yang with a short position of Hanshin Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sam Yang and Hanshin Construction.
Diversification Opportunities for Sam Yang and Hanshin Construction
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sam and Hanshin is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Sam Yang Foods and Hanshin Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanshin Construction and Sam Yang 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 Sam Yang Foods are associated (or correlated) with Hanshin Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanshin Construction has no effect on the direction of Sam Yang i.e., Sam Yang and Hanshin Construction go up and down completely randomly.
Pair Corralation between Sam Yang and Hanshin Construction
Assuming the 90 days trading horizon Sam Yang Foods is expected to under-perform the Hanshin Construction. In addition to that, Sam Yang is 1.57 times more volatile than Hanshin Construction Co. It trades about -0.23 of its total potential returns per unit of risk. Hanshin Construction Co is currently generating about -0.19 per unit of volatility. If you would invest 652,893 in Hanshin Construction Co on October 25, 2024 and sell it today you would lose (28,893) from holding Hanshin Construction Co or give up 4.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sam Yang Foods vs. Hanshin Construction Co
Performance |
| Timeline |
| Sam Yang Foods |
| Hanshin Construction |
Sam Yang and Hanshin Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sam Yang and Hanshin Construction
The main advantage of trading using opposite Sam Yang and Hanshin Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sam Yang position performs unexpectedly, Hanshin Construction 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 Hanshin Construction will offset losses from the drop in Hanshin Construction's long position.| Sam Yang vs. Daishin Information Communications | Sam Yang vs. Namhae Chemical | Sam Yang vs. SH Energy Chemical | Sam Yang vs. Mobile Appliance |
| Hanshin Construction vs. KB Financial Group | Hanshin Construction vs. Shinhan Financial Group | Hanshin Construction vs. Hana Financial | Hanshin Construction 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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