Correlation Between Sam Yang and DreamCIS
Can any of the company-specific risk be diversified away by investing in both Sam Yang and DreamCIS 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 DreamCIS 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 DreamCIS, you can compare the effects of market volatilities on Sam Yang and DreamCIS 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 DreamCIS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sam Yang and DreamCIS.
Diversification Opportunities for Sam Yang and DreamCIS
Very good diversification
The 3 months correlation between Sam and DreamCIS is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Sam Yang Foods and DreamCIS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DreamCIS 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 DreamCIS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DreamCIS has no effect on the direction of Sam Yang i.e., Sam Yang and DreamCIS go up and down completely randomly.
Pair Corralation between Sam Yang and DreamCIS
Assuming the 90 days trading horizon Sam Yang Foods is expected to generate 1.09 times more return on investment than DreamCIS. However, Sam Yang is 1.09 times more volatile than DreamCIS. It trades about 0.24 of its potential returns per unit of risk. DreamCIS is currently generating about -0.21 per unit of risk. If you would invest 56,200,000 in Sam Yang Foods on September 12, 2024 and sell it today you would earn a total of 10,700,000 from holding Sam Yang Foods or generate 19.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sam Yang Foods vs. DreamCIS
Performance |
| Timeline |
| Sam Yang Foods |
| DreamCIS |
Sam Yang and DreamCIS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sam Yang and DreamCIS
The main advantage of trading using opposite Sam Yang and DreamCIS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sam Yang position performs unexpectedly, DreamCIS 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 DreamCIS will offset losses from the drop in DreamCIS's long position.| Sam Yang vs. Samhyun Steel Co | Sam Yang vs. Hanjoo Light Metal | Sam Yang vs. Finebesteel | Sam Yang vs. Han Kook Steel |
| DreamCIS vs. Coloray International Investment | DreamCIS vs. Daol Investment Securities | DreamCIS vs. Daelim Trading Co | DreamCIS vs. Woori Technology Investment |
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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