Correlation Between Sam Yang and Tae Kyung
Can any of the company-specific risk be diversified away by investing in both Sam Yang and Tae Kyung 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 Tae Kyung 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 Tae Kyung Chemical, you can compare the effects of market volatilities on Sam Yang and Tae Kyung 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 Tae Kyung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sam Yang and Tae Kyung.
Diversification Opportunities for Sam Yang and Tae Kyung
Very weak diversification
The 3 months correlation between Sam and Tae is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Sam Yang Foods and Tae Kyung Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tae Kyung Chemical 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 Tae Kyung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tae Kyung Chemical has no effect on the direction of Sam Yang i.e., Sam Yang and Tae Kyung go up and down completely randomly.
Pair Corralation between Sam Yang and Tae Kyung
Assuming the 90 days trading horizon Sam Yang Foods is expected to generate 1.67 times more return on investment than Tae Kyung. However, Sam Yang is 1.67 times more volatile than Tae Kyung Chemical. It trades about 0.24 of its potential returns per unit of risk. Tae Kyung Chemical is currently generating about 0.08 per unit of risk. If you would invest 52,100,000 in Sam Yang Foods on October 26, 2024 and sell it today you would earn a total of 17,700,000 from holding Sam Yang Foods or generate 33.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sam Yang Foods vs. Tae Kyung Chemical
Performance |
| Timeline |
| Sam Yang Foods |
| Tae Kyung Chemical |
Sam Yang and Tae Kyung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sam Yang and Tae Kyung
The main advantage of trading using opposite Sam Yang and Tae Kyung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sam Yang position performs unexpectedly, Tae Kyung 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 Tae Kyung will offset losses from the drop in Tae Kyung's long position.| Sam Yang vs. Korea Computer | Sam Yang vs. Handok Clean Tech | Sam Yang vs. Adaptive Plasma Technology | Sam Yang vs. Bosung Power Technology |
| Tae Kyung vs. Daehan Steel | Tae Kyung vs. Sam Yang Foods | Tae Kyung vs. Hanjin Transportation Co | Tae Kyung vs. Bookook Steel |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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