Correlation Between Sam Yang and Kakao Games
Can any of the company-specific risk be diversified away by investing in both Sam Yang and Kakao Games 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 Kakao Games 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 Kakao Games Corp, you can compare the effects of market volatilities on Sam Yang and Kakao Games 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 Kakao Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sam Yang and Kakao Games.
Diversification Opportunities for Sam Yang and Kakao Games
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sam and Kakao is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Sam Yang Foods and Kakao Games Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kakao Games Corp 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 Kakao Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kakao Games Corp has no effect on the direction of Sam Yang i.e., Sam Yang and Kakao Games go up and down completely randomly.
Pair Corralation between Sam Yang and Kakao Games
Assuming the 90 days trading horizon Sam Yang Foods is expected to generate 1.59 times more return on investment than Kakao Games. However, Sam Yang is 1.59 times more volatile than Kakao Games Corp. It trades about 0.11 of its potential returns per unit of risk. Kakao Games Corp is currently generating about -0.08 per unit of risk. If you would invest 11,645,300 in Sam Yang Foods on August 31, 2024 and sell it today you would earn a total of 40,654,700 from holding Sam Yang Foods or generate 349.11% 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. Kakao Games Corp
Performance |
| Timeline |
| Sam Yang Foods |
| Kakao Games Corp |
Sam Yang and Kakao Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sam Yang and Kakao Games
The main advantage of trading using opposite Sam Yang and Kakao Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sam Yang position performs unexpectedly, Kakao Games 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 Kakao Games will offset losses from the drop in Kakao Games' 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 |
| Kakao Games vs. Devsisters corporation | Kakao Games vs. Konan Technology | Kakao Games vs. Nice Information Telecommunication | Kakao Games vs. SKONEC Entertainment 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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