Correlation Between Sam Yang and Daewoo Electronic
Can any of the company-specific risk be diversified away by investing in both Sam Yang and Daewoo Electronic 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 Daewoo Electronic 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 Daewoo Electronic Components, you can compare the effects of market volatilities on Sam Yang and Daewoo Electronic 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 Daewoo Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sam Yang and Daewoo Electronic.
Diversification Opportunities for Sam Yang and Daewoo Electronic
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sam and Daewoo is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sam Yang Foods and Daewoo Electronic Components in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewoo Electronic 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 Daewoo Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewoo Electronic has no effect on the direction of Sam Yang i.e., Sam Yang and Daewoo Electronic go up and down completely randomly.
Pair Corralation between Sam Yang and Daewoo Electronic
Assuming the 90 days trading horizon Sam Yang Foods is expected to generate 1.54 times more return on investment than Daewoo Electronic. However, Sam Yang is 1.54 times more volatile than Daewoo Electronic Components. It trades about 0.12 of its potential returns per unit of risk. Daewoo Electronic Components is currently generating about -0.02 per unit of risk. If you would invest 12,313,500 in Sam Yang Foods on November 6, 2024 and sell it today you would earn a total of 58,486,500 from holding Sam Yang Foods or generate 474.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sam Yang Foods vs. Daewoo Electronic Components
Performance |
| Timeline |
| Sam Yang Foods |
| Daewoo Electronic |
Sam Yang and Daewoo Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sam Yang and Daewoo Electronic
The main advantage of trading using opposite Sam Yang and Daewoo Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sam Yang position performs unexpectedly, Daewoo Electronic 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 Daewoo Electronic will offset losses from the drop in Daewoo Electronic's long position.| Sam Yang vs. Hyosung Advanced Materials | Sam Yang vs. InnoTherapy | Sam Yang vs. INNOX Advanced Materials | Sam Yang vs. Infinitt Healthcare Co |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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