Correlation Between Samyang Foods and PlayD
Can any of the company-specific risk be diversified away by investing in both Samyang Foods and PlayD 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 PlayD 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 PlayD Co, you can compare the effects of market volatilities on Samyang Foods and PlayD 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 PlayD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samyang Foods and PlayD.
Diversification Opportunities for Samyang Foods and PlayD
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Samyang and PlayD is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Samyang Foods Co and PlayD Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PlayD 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 PlayD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PlayD has no effect on the direction of Samyang Foods i.e., Samyang Foods and PlayD go up and down completely randomly.
Pair Corralation between Samyang Foods and PlayD
Assuming the 90 days trading horizon Samyang Foods Co is expected to generate 1.4 times more return on investment than PlayD. However, Samyang Foods is 1.4 times more volatile than PlayD Co. It trades about 0.18 of its potential returns per unit of risk. PlayD Co is currently generating about -0.16 per unit of risk. If you would invest 68,700,000 in Samyang Foods Co on October 14, 2024 and sell it today you would earn a total of 6,300,000 from holding Samyang Foods Co or generate 9.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samyang Foods Co vs. PlayD Co
Performance |
| Timeline |
| Samyang Foods |
| PlayD |
Samyang Foods and PlayD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samyang Foods and PlayD
The main advantage of trading using opposite Samyang Foods and PlayD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samyang Foods position performs unexpectedly, PlayD 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 PlayD will offset losses from the drop in PlayD's long position.| Samyang Foods vs. Korea Shipbuilding Offshore | Samyang Foods vs. DRB Industrial Co | Samyang Foods vs. Dongil Metal Co | Samyang Foods vs. Shinil Industrial 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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