Correlation Between Sam Yang and LabGenomics
Can any of the company-specific risk be diversified away by investing in both Sam Yang and LabGenomics 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 LabGenomics 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 LabGenomics Co, you can compare the effects of market volatilities on Sam Yang and LabGenomics 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 LabGenomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sam Yang and LabGenomics.
Diversification Opportunities for Sam Yang and LabGenomics
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sam and LabGenomics is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Sam Yang Foods and LabGenomics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LabGenomics 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 LabGenomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LabGenomics has no effect on the direction of Sam Yang i.e., Sam Yang and LabGenomics go up and down completely randomly.
Pair Corralation between Sam Yang and LabGenomics
Assuming the 90 days trading horizon Sam Yang Foods is expected to generate 0.73 times more return on investment than LabGenomics. However, Sam Yang Foods is 1.38 times less risky than LabGenomics. It trades about -0.29 of its potential returns per unit of risk. LabGenomics Co is currently generating about -0.48 per unit of risk. If you would invest 58,900,000 in Sam Yang Foods on September 3, 2024 and sell it today you would lose (7,000,000) from holding Sam Yang Foods or give up 11.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sam Yang Foods vs. LabGenomics Co
Performance |
| Timeline |
| Sam Yang Foods |
| LabGenomics |
Sam Yang and LabGenomics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sam Yang and LabGenomics
The main advantage of trading using opposite Sam Yang and LabGenomics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sam Yang position performs unexpectedly, LabGenomics 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 LabGenomics will offset losses from the drop in LabGenomics' long position.| Sam Yang vs. LG Display | Sam Yang vs. Hyundai Motor | Sam Yang vs. Hyundai Motor Co | Sam Yang vs. Hyundai Motor Co |
| LabGenomics vs. SH Energy Chemical | LabGenomics vs. Miwon Chemical | LabGenomics vs. Barunson Entertainment Arts | LabGenomics vs. Posco Chemical Co |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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