Correlation Between Sam Yang and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Sam Yang and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Sam Yang and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sam Yang and Dow Jones.
Diversification Opportunities for Sam Yang and Dow Jones
Very good diversification
The 3 months correlation between Sam and Dow is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Sam Yang Foods and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Sam Yang i.e., Sam Yang and Dow Jones go up and down completely randomly.
Pair Corralation between Sam Yang and Dow Jones
Assuming the 90 days trading horizon Sam Yang Foods is expected to generate 5.01 times more return on investment than Dow Jones. However, Sam Yang is 5.01 times more volatile than Dow Jones Industrial. It trades about 0.12 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 11,871,300 in Sam Yang Foods on October 25, 2024 and sell it today you would earn a total of 60,028,700 from holding Sam Yang Foods or generate 505.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.57% |
| Values | Daily Returns |
Sam Yang Foods vs. Dow Jones Industrial
Performance |
| Timeline |
Sam Yang and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Sam Yang Foods
Pair trading matchups for Sam Yang
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Sam Yang and Dow Jones
The main advantage of trading using opposite Sam Yang and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sam Yang position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Sam Yang vs. Daishin Information Communications | Sam Yang vs. Namhae Chemical | Sam Yang vs. SH Energy Chemical | Sam Yang vs. Mobile Appliance |
| Dow Jones vs. Xiabuxiabu Catering Management | Dow Jones vs. Neogen | Dow Jones vs. Orion Office Reit | Dow Jones vs. Bassett Furniture Industries |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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