Correlation Between Samyang Foods and ED
Can any of the company-specific risk be diversified away by investing in both Samyang Foods and ED 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 ED 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 ED Co, you can compare the effects of market volatilities on Samyang Foods and ED 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 ED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samyang Foods and ED.
Diversification Opportunities for Samyang Foods and ED
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samyang and ED is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Samyang Foods Co and ED Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ED Co 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 ED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ED Co has no effect on the direction of Samyang Foods i.e., Samyang Foods and ED go up and down completely randomly.
Pair Corralation between Samyang Foods and ED
Assuming the 90 days trading horizon Samyang Foods Co is expected to generate 0.62 times more return on investment than ED. However, Samyang Foods Co is 1.6 times less risky than ED. It trades about 0.12 of its potential returns per unit of risk. ED Co is currently generating about 0.04 per unit of risk. If you would invest 11,792,700 in Samyang Foods Co on October 9, 2024 and sell it today you would earn a total of 61,607,300 from holding Samyang Foods Co or generate 522.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Samyang Foods Co vs. ED Co
Performance |
| Timeline |
| Samyang Foods |
| ED Co |
Samyang Foods and ED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samyang Foods and ED
The main advantage of trading using opposite Samyang Foods and ED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samyang Foods position performs unexpectedly, ED 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 ED will offset losses from the drop in ED's long position.| Samyang Foods vs. Dongnam Chemical Co | Samyang Foods vs. Youngbo Chemical Co | Samyang Foods vs. Lotte Fine Chemical | Samyang Foods vs. Shinhan Inverse Silver |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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