Correlation Between Samyang Foods and Innometry
Can any of the company-specific risk be diversified away by investing in both Samyang Foods and Innometry 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 Innometry 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 Innometry Co, you can compare the effects of market volatilities on Samyang Foods and Innometry 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 Innometry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samyang Foods and Innometry.
Diversification Opportunities for Samyang Foods and Innometry
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samyang and Innometry is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Samyang Foods Co and Innometry Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innometry 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 Innometry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innometry has no effect on the direction of Samyang Foods i.e., Samyang Foods and Innometry go up and down completely randomly.
Pair Corralation between Samyang Foods and Innometry
Assuming the 90 days trading horizon Samyang Foods Co is expected to under-perform the Innometry. In addition to that, Samyang Foods is 1.4 times more volatile than Innometry Co. It trades about -0.21 of its total potential returns per unit of risk. Innometry Co is currently generating about -0.15 per unit of volatility. If you would invest 752,000 in Innometry Co on November 4, 2024 and sell it today you would lose (30,000) from holding Innometry Co or give up 3.99% 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. Innometry Co
Performance |
| Timeline |
| Samyang Foods |
| Innometry |
Samyang Foods and Innometry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samyang Foods and Innometry
The main advantage of trading using opposite Samyang Foods and Innometry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samyang Foods position performs unexpectedly, Innometry 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 Innometry will offset losses from the drop in Innometry's long position.| Samyang Foods vs. Youngsin Metal Industrial | Samyang Foods vs. Moonbae Steel | Samyang Foods vs. Hanjoo Light Metal | Samyang Foods vs. Korea 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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