Correlation Between Samyang Foods and Raontech
Can any of the company-specific risk be diversified away by investing in both Samyang Foods and Raontech 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 Raontech 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 Raontech, you can compare the effects of market volatilities on Samyang Foods and Raontech 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 Raontech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samyang Foods and Raontech.
Diversification Opportunities for Samyang Foods and Raontech
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samyang and Raontech is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Samyang Foods Co and Raontech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raontech 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 Raontech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raontech has no effect on the direction of Samyang Foods i.e., Samyang Foods and Raontech go up and down completely randomly.
Pair Corralation between Samyang Foods and Raontech
Assuming the 90 days trading horizon Samyang Foods is expected to generate 3.62 times less return on investment than Raontech. But when comparing it to its historical volatility, Samyang Foods Co is 1.69 times less risky than Raontech. It trades about 0.08 of its potential returns per unit of risk. Raontech is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 314,000 in Raontech on October 17, 2024 and sell it today you would earn a total of 44,000 from holding Raontech or generate 14.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samyang Foods Co vs. Raontech
Performance |
| Timeline |
| Samyang Foods |
| Raontech |
Samyang Foods and Raontech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samyang Foods and Raontech
The main advantage of trading using opposite Samyang Foods and Raontech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samyang Foods position performs unexpectedly, Raontech 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 Raontech will offset losses from the drop in Raontech's long position.| Samyang Foods vs. Tuksu Engineering ConstructionLtd | Samyang Foods vs. GS Engineering Construction | Samyang Foods vs. Miwon Chemical | Samyang Foods vs. Namhae Chemical |
| Raontech vs. Sam Yang Foods | Raontech vs. Woorim Machinery Co | Raontech vs. Keyang Electric Machinery | Raontech vs. Samyang Foods 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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