Correlation Between Samyang Foods and ADTechnology CoLtd
Can any of the company-specific risk be diversified away by investing in both Samyang Foods and ADTechnology CoLtd 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 ADTechnology CoLtd 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 ADTechnology CoLtd, you can compare the effects of market volatilities on Samyang Foods and ADTechnology CoLtd 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 ADTechnology CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samyang Foods and ADTechnology CoLtd.
Diversification Opportunities for Samyang Foods and ADTechnology CoLtd
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samyang and ADTechnology is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Samyang Foods Co and ADTechnology CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADTechnology CoLtd 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 ADTechnology CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADTechnology CoLtd has no effect on the direction of Samyang Foods i.e., Samyang Foods and ADTechnology CoLtd go up and down completely randomly.
Pair Corralation between Samyang Foods and ADTechnology CoLtd
Assuming the 90 days trading horizon Samyang Foods Co is expected to generate 0.93 times more return on investment than ADTechnology CoLtd. However, Samyang Foods Co is 1.08 times less risky than ADTechnology CoLtd. It trades about 0.23 of its potential returns per unit of risk. ADTechnology CoLtd is currently generating about 0.11 per unit of risk. If you would invest 73,700,000 in Samyang Foods Co on November 21, 2024 and sell it today you would earn a total of 13,700,000 from holding Samyang Foods Co or generate 18.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Samyang Foods Co vs. ADTechnology CoLtd
Performance |
Timeline |
Samyang Foods |
ADTechnology CoLtd |
Samyang Foods and ADTechnology CoLtd Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samyang Foods and ADTechnology CoLtd
The main advantage of trading using opposite Samyang Foods and ADTechnology CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samyang Foods position performs unexpectedly, ADTechnology CoLtd 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 ADTechnology CoLtd will offset losses from the drop in ADTechnology CoLtd's long position.Samyang Foods vs. Dongil Steel Co | ||
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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