Correlation Between Samyang Foods and Seoyon Topmetal
Can any of the company-specific risk be diversified away by investing in both Samyang Foods and Seoyon Topmetal 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 Seoyon Topmetal 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 Seoyon Topmetal Co, you can compare the effects of market volatilities on Samyang Foods and Seoyon Topmetal 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 Seoyon Topmetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samyang Foods and Seoyon Topmetal.
Diversification Opportunities for Samyang Foods and Seoyon Topmetal
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samyang and Seoyon is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Samyang Foods Co and Seoyon Topmetal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoyon Topmetal 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 Seoyon Topmetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoyon Topmetal has no effect on the direction of Samyang Foods i.e., Samyang Foods and Seoyon Topmetal go up and down completely randomly.
Pair Corralation between Samyang Foods and Seoyon Topmetal
Assuming the 90 days trading horizon Samyang Foods Co is expected to under-perform the Seoyon Topmetal. In addition to that, Samyang Foods is 1.56 times more volatile than Seoyon Topmetal Co. It trades about -0.16 of its total potential returns per unit of risk. Seoyon Topmetal Co is currently generating about 0.25 per unit of volatility. If you would invest 337,000 in Seoyon Topmetal Co on October 28, 2024 and sell it today you would earn a total of 21,500 from holding Seoyon Topmetal Co or generate 6.38% 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. Seoyon Topmetal Co
Performance |
| Timeline |
| Samyang Foods |
| Seoyon Topmetal |
Samyang Foods and Seoyon Topmetal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samyang Foods and Seoyon Topmetal
The main advantage of trading using opposite Samyang Foods and Seoyon Topmetal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samyang Foods position performs unexpectedly, Seoyon Topmetal 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 Seoyon Topmetal will offset losses from the drop in Seoyon Topmetal's long position.| Samyang Foods vs. KB Financial Group | Samyang Foods vs. Shinhan Financial Group | Samyang Foods vs. Hana Financial | Samyang Foods vs. Woori Financial Group |
| Seoyon Topmetal vs. Samsung Electronics Co | Seoyon Topmetal vs. Samsung Electronics Co | Seoyon Topmetal vs. KB Financial Group | Seoyon Topmetal vs. Shinhan Financial Group |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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