Correlation Between Sam Yang and Home Center
Can any of the company-specific risk be diversified away by investing in both Sam Yang and Home Center 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 Home Center 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 Home Center Holdings, you can compare the effects of market volatilities on Sam Yang and Home Center 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 Home Center. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sam Yang and Home Center.
Diversification Opportunities for Sam Yang and Home Center
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sam and Home is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sam Yang Foods and Home Center Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Center Holdings 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 Home Center. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Center Holdings has no effect on the direction of Sam Yang i.e., Sam Yang and Home Center go up and down completely randomly.
Pair Corralation between Sam Yang and Home Center
Assuming the 90 days trading horizon Sam Yang Foods is expected to generate 1.75 times more return on investment than Home Center. However, Sam Yang is 1.75 times more volatile than Home Center Holdings. It trades about 0.01 of its potential returns per unit of risk. Home Center Holdings is currently generating about -0.09 per unit of risk. If you would invest 52,000,000 in Sam Yang Foods on September 2, 2024 and sell it today you would lose (100,000) from holding Sam Yang Foods or give up 0.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sam Yang Foods vs. Home Center Holdings
Performance |
| Timeline |
| Sam Yang Foods |
| Home Center Holdings |
Sam Yang and Home Center Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sam Yang and Home Center
The main advantage of trading using opposite Sam Yang and Home Center positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sam Yang position performs unexpectedly, Home Center 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 Home Center will offset losses from the drop in Home Center's long position.| Sam Yang vs. Korea Real Estate | Sam Yang vs. Korea Ratings Co | Sam Yang vs. IQuest Co | Sam Yang vs. Wonbang Tech Co |
| Home Center vs. LG Chemicals | Home Center vs. POSCO Holdings | Home Center vs. Hanwha Solutions | Home Center vs. Hyundai 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 Stocks Directory module to find actively traded stocks across global markets.
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