Correlation Between Sam Yang and SGC Energy
Can any of the company-specific risk be diversified away by investing in both Sam Yang and SGC Energy 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 SGC Energy 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 SGC Energy Co, you can compare the effects of market volatilities on Sam Yang and SGC Energy 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 SGC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sam Yang and SGC Energy.
Diversification Opportunities for Sam Yang and SGC Energy
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sam and SGC is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sam Yang Foods and SGC Energy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGC Energy 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 SGC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGC Energy has no effect on the direction of Sam Yang i.e., Sam Yang and SGC Energy go up and down completely randomly.
Pair Corralation between Sam Yang and SGC Energy
Assuming the 90 days trading horizon Sam Yang Foods is expected to generate 2.2 times more return on investment than SGC Energy. However, Sam Yang is 2.2 times more volatile than SGC Energy Co. It trades about 0.11 of its potential returns per unit of risk. SGC Energy Co is currently generating about -0.1 per unit of risk. If you would invest 48,600,000 in Sam Yang Foods on September 4, 2024 and sell it today you would earn a total of 9,600,000 from holding Sam Yang Foods or generate 19.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sam Yang Foods vs. SGC Energy Co
Performance |
| Timeline |
| Sam Yang Foods |
| SGC Energy |
Sam Yang and SGC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sam Yang and SGC Energy
The main advantage of trading using opposite Sam Yang and SGC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sam Yang position performs unexpectedly, SGC Energy 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 SGC Energy will offset losses from the drop in SGC Energy's long position.| Sam Yang vs. LG Display | Sam Yang vs. Hyundai Motor | Sam Yang vs. Hyundai Motor Co | Sam Yang vs. Hyundai Motor Co |
| SGC Energy vs. Samyang Foods Co | SGC Energy vs. Samlip General Foods | SGC Energy vs. Sempio Foods Co | SGC Energy vs. Sam Yang Foods |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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