Correlation Between Samyang Foods and Semyung Electric
Can any of the company-specific risk be diversified away by investing in both Samyang Foods and Semyung Electric 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 Semyung Electric 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 Semyung Electric Machinery, you can compare the effects of market volatilities on Samyang Foods and Semyung Electric 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 Semyung Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samyang Foods and Semyung Electric.
Diversification Opportunities for Samyang Foods and Semyung Electric
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samyang and Semyung is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Samyang Foods Co and Semyung Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semyung Electric Mac 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 Semyung Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semyung Electric Mac has no effect on the direction of Samyang Foods i.e., Samyang Foods and Semyung Electric go up and down completely randomly.
Pair Corralation between Samyang Foods and Semyung Electric
Assuming the 90 days trading horizon Samyang Foods is expected to generate 1.76 times less return on investment than Semyung Electric. In addition to that, Samyang Foods is 1.11 times more volatile than Semyung Electric Machinery. It trades about 0.18 of its total potential returns per unit of risk. Semyung Electric Machinery is currently generating about 0.35 per unit of volatility. If you would invest 442,689 in Semyung Electric Machinery on October 14, 2024 and sell it today you would earn a total of 77,311 from holding Semyung Electric Machinery or generate 17.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samyang Foods Co vs. Semyung Electric Machinery
Performance |
| Timeline |
| Samyang Foods |
| Semyung Electric Mac |
Samyang Foods and Semyung Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samyang Foods and Semyung Electric
The main advantage of trading using opposite Samyang Foods and Semyung Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samyang Foods position performs unexpectedly, Semyung Electric 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 Semyung Electric will offset losses from the drop in Semyung Electric's long position.| Samyang Foods vs. Dongbu Insurance Co | Samyang Foods vs. PlayD Co | Samyang Foods vs. Koryo Credit Information | Samyang Foods vs. Iljin Display |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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