Correlation Between Sam Yang and Hana Materials
Can any of the company-specific risk be diversified away by investing in both Sam Yang and Hana Materials 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 Hana Materials 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 Hana Materials, you can compare the effects of market volatilities on Sam Yang and Hana Materials 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 Hana Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sam Yang and Hana Materials.
Diversification Opportunities for Sam Yang and Hana Materials
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sam and Hana is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sam Yang Foods and Hana Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Materials 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 Hana Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Materials has no effect on the direction of Sam Yang i.e., Sam Yang and Hana Materials go up and down completely randomly.
Pair Corralation between Sam Yang and Hana Materials
Assuming the 90 days trading horizon Sam Yang Foods is expected to generate 1.02 times more return on investment than Hana Materials. However, Sam Yang is 1.02 times more volatile than Hana Materials. It trades about 0.27 of its potential returns per unit of risk. Hana Materials is currently generating about 0.13 per unit of risk. If you would invest 51,900,000 in Sam Yang Foods on October 30, 2024 and sell it today you would earn a total of 19,100,000 from holding Sam Yang Foods or generate 36.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sam Yang Foods vs. Hana Materials
Performance |
| Timeline |
| Sam Yang Foods |
| Hana Materials |
Sam Yang and Hana Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sam Yang and Hana Materials
The main advantage of trading using opposite Sam Yang and Hana Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sam Yang position performs unexpectedly, Hana Materials 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 Hana Materials will offset losses from the drop in Hana Materials' long position.| Sam Yang vs. Wireless Power Amplifier | Sam Yang vs. TK Chemical | Sam Yang vs. Youl Chon Chemical | Sam Yang vs. Innowireless Co |
| Hana Materials vs. Jeju Air Co | Hana Materials vs. LG Display Co | Hana Materials vs. Duksan Hi Metal | Hana Materials vs. Korea Air Svc |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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