Correlation Between Samyang Foods and FoodNamoo
Can any of the company-specific risk be diversified away by investing in both Samyang Foods and FoodNamoo 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 FoodNamoo 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 FoodNamoo, you can compare the effects of market volatilities on Samyang Foods and FoodNamoo 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 FoodNamoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samyang Foods and FoodNamoo.
Diversification Opportunities for Samyang Foods and FoodNamoo
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samyang and FoodNamoo is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Samyang Foods Co and FoodNamoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FoodNamoo 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 FoodNamoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FoodNamoo has no effect on the direction of Samyang Foods i.e., Samyang Foods and FoodNamoo go up and down completely randomly.
Pair Corralation between Samyang Foods and FoodNamoo
Assuming the 90 days trading horizon Samyang Foods Co is expected to generate 1.33 times more return on investment than FoodNamoo. However, Samyang Foods is 1.33 times more volatile than FoodNamoo. It trades about -0.11 of its potential returns per unit of risk. FoodNamoo is currently generating about -0.41 per unit of risk. If you would invest 73,900,000 in Samyang Foods Co on November 1, 2024 and sell it today you would lose (2,900,000) from holding Samyang Foods Co or give up 3.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samyang Foods Co vs. FoodNamoo
Performance |
| Timeline |
| Samyang Foods |
| FoodNamoo |
Samyang Foods and FoodNamoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samyang Foods and FoodNamoo
The main advantage of trading using opposite Samyang Foods and FoodNamoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samyang Foods position performs unexpectedly, FoodNamoo 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 FoodNamoo will offset losses from the drop in FoodNamoo's long position.| Samyang Foods vs. Kg Chemical | Samyang Foods vs. LG Household Healthcare | Samyang Foods vs. Miwon Chemical | Samyang Foods vs. Lotte Rental Co |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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