Correlation Between Samyang Foods and Kumho Ind
Can any of the company-specific risk be diversified away by investing in both Samyang Foods and Kumho Ind 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 Samyang Foods and Kumho Ind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samyang Foods Co and Kumho Ind, you can compare the effects of market volatilities on Samyang Foods and Kumho Ind 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 Samyang Foods with a short position of Kumho Ind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samyang Foods and Kumho Ind.
Diversification Opportunities for Samyang Foods and Kumho Ind
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samyang and Kumho is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Samyang Foods Co and Kumho Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumho Ind and Samyang Foods 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 Samyang Foods Co are associated (or correlated) with Kumho Ind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumho Ind has no effect on the direction of Samyang Foods i.e., Samyang Foods and Kumho Ind go up and down completely randomly.
Pair Corralation between Samyang Foods and Kumho Ind
Assuming the 90 days trading horizon Samyang Foods Co is expected to generate 0.84 times more return on investment than Kumho Ind. However, Samyang Foods Co is 1.19 times less risky than Kumho Ind. It trades about 0.24 of its potential returns per unit of risk. Kumho Ind is currently generating about 0.01 per unit of risk. If you would invest 56,200,000 in Samyang Foods Co on September 12, 2024 and sell it today you would earn a total of 10,700,000 from holding Samyang Foods Co or generate 19.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samyang Foods Co vs. Kumho Ind
Performance |
| Timeline |
| Samyang Foods |
| Kumho Ind |
Samyang Foods and Kumho Ind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samyang Foods and Kumho Ind
The main advantage of trading using opposite Samyang Foods and Kumho Ind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samyang Foods position performs unexpectedly, Kumho Ind 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 Kumho Ind will offset losses from the drop in Kumho Ind's long position.| Samyang Foods vs. Samsung Electronics Co | Samyang Foods vs. Samsung Electronics Co | Samyang Foods vs. SK Hynix | Samyang Foods vs. POSCO Holdings |
| Kumho Ind vs. CKH Food Health | Kumho Ind vs. Samyang Foods Co | Kumho Ind vs. Shinsung Delta Tech | Kumho Ind vs. Seoul Food Industrial |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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