Correlation Between Sam Yang and ISU Abxis
Can any of the company-specific risk be diversified away by investing in both Sam Yang and ISU Abxis 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 ISU Abxis 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 ISU Abxis Co, you can compare the effects of market volatilities on Sam Yang and ISU Abxis 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 ISU Abxis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sam Yang and ISU Abxis.
Diversification Opportunities for Sam Yang and ISU Abxis
Good diversification
The 3 months correlation between Sam and ISU is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Sam Yang Foods and ISU Abxis Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ISU Abxis 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 ISU Abxis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ISU Abxis has no effect on the direction of Sam Yang i.e., Sam Yang and ISU Abxis go up and down completely randomly.
Pair Corralation between Sam Yang and ISU Abxis
Assuming the 90 days trading horizon Sam Yang Foods is expected to generate 1.46 times more return on investment than ISU Abxis. However, Sam Yang is 1.46 times more volatile than ISU Abxis Co. It trades about -0.01 of its potential returns per unit of risk. ISU Abxis Co is currently generating about -0.09 per unit of risk. If you would invest 58,523,900 in Sam Yang Foods on September 1, 2024 and sell it today you would lose (6,623,900) from holding Sam Yang Foods or give up 11.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Sam Yang Foods vs. ISU Abxis Co
Performance |
| Timeline |
| Sam Yang Foods |
| ISU Abxis |
Sam Yang and ISU Abxis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sam Yang and ISU Abxis
The main advantage of trading using opposite Sam Yang and ISU Abxis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sam Yang position performs unexpectedly, ISU Abxis 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 ISU Abxis will offset losses from the drop in ISU Abxis' 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 |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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