Correlation Between Samyang Foods and Posco Chemical
Can any of the company-specific risk be diversified away by investing in both Samyang Foods and Posco Chemical 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 Posco Chemical 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 Posco Chemical Co, you can compare the effects of market volatilities on Samyang Foods and Posco Chemical 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 Posco Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samyang Foods and Posco Chemical.
Diversification Opportunities for Samyang Foods and Posco Chemical
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Samyang and Posco is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Samyang Foods Co and Posco Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Posco Chemical 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 Posco Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Posco Chemical has no effect on the direction of Samyang Foods i.e., Samyang Foods and Posco Chemical go up and down completely randomly.
Pair Corralation between Samyang Foods and Posco Chemical
Assuming the 90 days trading horizon Samyang Foods Co is expected to generate 0.53 times more return on investment than Posco Chemical. However, Samyang Foods Co is 1.87 times less risky than Posco Chemical. It trades about -0.29 of its potential returns per unit of risk. Posco Chemical Co is currently generating about -0.41 per unit of risk. If you would invest 58,900,000 in Samyang Foods Co on September 3, 2024 and sell it today you would lose (7,000,000) from holding Samyang Foods Co or give up 11.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samyang Foods Co vs. Posco Chemical Co
Performance |
| Timeline |
| Samyang Foods |
| Posco Chemical |
Samyang Foods and Posco Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samyang Foods and Posco Chemical
The main advantage of trading using opposite Samyang Foods and Posco Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samyang Foods position performs unexpectedly, Posco Chemical 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 Posco Chemical will offset losses from the drop in Posco Chemical's long position.| Samyang Foods vs. System and Application | Samyang Foods vs. FNSTech Co | Samyang Foods vs. CU Tech Corp | Samyang Foods vs. Sungchang Autotech Co |
| Posco Chemical vs. Lotte Chilsung Beverage | Posco Chemical vs. SCI Information Service | Posco Chemical vs. Handok Clean Tech | Posco Chemical vs. Samyang Foods 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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