Correlation Between Sam Yang and Guyoung Technology
Can any of the company-specific risk be diversified away by investing in both Sam Yang and Guyoung Technology 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 Guyoung Technology 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 Guyoung Technology Co, you can compare the effects of market volatilities on Sam Yang and Guyoung Technology 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 Guyoung Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sam Yang and Guyoung Technology.
Diversification Opportunities for Sam Yang and Guyoung Technology
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sam and Guyoung is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sam Yang Foods and Guyoung Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guyoung Technology 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 Guyoung Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guyoung Technology has no effect on the direction of Sam Yang i.e., Sam Yang and Guyoung Technology go up and down completely randomly.
Pair Corralation between Sam Yang and Guyoung Technology
Assuming the 90 days trading horizon Sam Yang Foods is expected to under-perform the Guyoung Technology. But the stock apears to be less risky and, when comparing its historical volatility, Sam Yang Foods is 1.23 times less risky than Guyoung Technology. The stock trades about -0.19 of its potential returns per unit of risk. The Guyoung Technology Co is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 205,000 in Guyoung Technology Co on November 7, 2024 and sell it today you would earn a total of 17,000 from holding Guyoung Technology Co or generate 8.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 89.47% |
| Values | Daily Returns |
Sam Yang Foods vs. Guyoung Technology Co
Performance |
| Timeline |
| Sam Yang Foods |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Guyoung Technology |
Sam Yang and Guyoung Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sam Yang and Guyoung Technology
The main advantage of trading using opposite Sam Yang and Guyoung Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sam Yang position performs unexpectedly, Guyoung Technology 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 Guyoung Technology will offset losses from the drop in Guyoung Technology's long position.The idea behind Sam Yang Foods and Guyoung Technology Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Guyoung Technology vs. Samsung Electronics Co | Guyoung Technology vs. Samsung Electronics Co | Guyoung Technology vs. Hyundai Motor Co | Guyoung Technology vs. LG Electronics |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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