Correlation Between Samyang Foods and Hwaseung Industries
Can any of the company-specific risk be diversified away by investing in both Samyang Foods and Hwaseung Industries 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 Hwaseung Industries 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 Hwaseung Industries Co, you can compare the effects of market volatilities on Samyang Foods and Hwaseung Industries 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 Hwaseung Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samyang Foods and Hwaseung Industries.
Diversification Opportunities for Samyang Foods and Hwaseung Industries
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samyang and Hwaseung is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Samyang Foods Co and Hwaseung Industries Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwaseung Industries 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 Hwaseung Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwaseung Industries has no effect on the direction of Samyang Foods i.e., Samyang Foods and Hwaseung Industries go up and down completely randomly.
Pair Corralation between Samyang Foods and Hwaseung Industries
Assuming the 90 days trading horizon Samyang Foods Co is expected to generate 2.5 times more return on investment than Hwaseung Industries. However, Samyang Foods is 2.5 times more volatile than Hwaseung Industries Co. It trades about 0.11 of its potential returns per unit of risk. Hwaseung Industries Co is currently generating about 0.01 per unit of risk. If you would invest 30,458,400 in Samyang Foods Co on September 3, 2024 and sell it today you would earn a total of 21,441,600 from holding Samyang Foods Co or generate 70.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samyang Foods Co vs. Hwaseung Industries Co
Performance |
| Timeline |
| Samyang Foods |
| Hwaseung Industries |
Samyang Foods and Hwaseung Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samyang Foods and Hwaseung Industries
The main advantage of trading using opposite Samyang Foods and Hwaseung Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samyang Foods position performs unexpectedly, Hwaseung Industries 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 Hwaseung Industries will offset losses from the drop in Hwaseung Industries' 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 |
| Hwaseung Industries vs. Samyang Foods Co | Hwaseung Industries vs. Hankook Furniture Co | Hwaseung Industries vs. CJ Seafood Corp | Hwaseung Industries vs. Sempio 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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