Correlation Between Sam Yang and DB Insurance
Can any of the company-specific risk be diversified away by investing in both Sam Yang and DB Insurance 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 DB Insurance 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 DB Insurance Co, you can compare the effects of market volatilities on Sam Yang and DB Insurance 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 DB Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sam Yang and DB Insurance.
Diversification Opportunities for Sam Yang and DB Insurance
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sam and 005830 is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sam Yang Foods and DB Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Insurance 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 DB Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DB Insurance has no effect on the direction of Sam Yang i.e., Sam Yang and DB Insurance go up and down completely randomly.
Pair Corralation between Sam Yang and DB Insurance
Assuming the 90 days trading horizon Sam Yang Foods is expected to generate 1.1 times more return on investment than DB Insurance. However, Sam Yang is 1.1 times more volatile than DB Insurance Co. It trades about 0.04 of its potential returns per unit of risk. DB Insurance Co is currently generating about 0.03 per unit of risk. If you would invest 58,900,000 in Sam Yang Foods on September 5, 2024 and sell it today you would earn a total of 900,000 from holding Sam Yang Foods or generate 1.53% 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. DB Insurance Co
Performance |
| Timeline |
| Sam Yang Foods |
| DB Insurance |
Sam Yang and DB Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sam Yang and DB Insurance
The main advantage of trading using opposite Sam Yang and DB Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sam Yang position performs unexpectedly, DB Insurance 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 DB Insurance will offset losses from the drop in DB Insurance'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 |
| DB Insurance vs. Sam Yang Foods | DB Insurance vs. Organic Special Pet | DB Insurance vs. Dongbang Transport Logistics | DB Insurance vs. Samsung Life Insurance |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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