Correlation Between Songwon Industrial and Sam Yang
Can any of the company-specific risk be diversified away by investing in both Songwon Industrial and Sam Yang 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 Songwon Industrial and Sam Yang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Songwon Industrial Co and Sam Yang Foods, you can compare the effects of market volatilities on Songwon Industrial and Sam Yang 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 Songwon Industrial with a short position of Sam Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Songwon Industrial and Sam Yang.
Diversification Opportunities for Songwon Industrial and Sam Yang
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Songwon and Sam is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Songwon Industrial Co and Sam Yang Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sam Yang Foods and Songwon Industrial 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 Songwon Industrial Co are associated (or correlated) with Sam Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sam Yang Foods has no effect on the direction of Songwon Industrial i.e., Songwon Industrial and Sam Yang go up and down completely randomly.
Pair Corralation between Songwon Industrial and Sam Yang
Assuming the 90 days trading horizon Songwon Industrial Co is expected to generate 1.2 times more return on investment than Sam Yang. However, Songwon Industrial is 1.2 times more volatile than Sam Yang Foods. It trades about 0.31 of its potential returns per unit of risk. Sam Yang Foods is currently generating about -0.19 per unit of risk. If you would invest 1,081,000 in Songwon Industrial Co on November 3, 2024 and sell it today you would earn a total of 159,000 from holding Songwon Industrial Co or generate 14.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Songwon Industrial Co vs. Sam Yang Foods
Performance |
| Timeline |
| Songwon Industrial |
| Sam Yang Foods |
Songwon Industrial and Sam Yang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Songwon Industrial and Sam Yang
The main advantage of trading using opposite Songwon Industrial and Sam Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Songwon Industrial position performs unexpectedly, Sam Yang 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 Sam Yang will offset losses from the drop in Sam Yang's long position.| Songwon Industrial vs. LEENO Industrial | Songwon Industrial vs. Seoyon Topmetal Co | Songwon Industrial vs. Seoul Food Industrial | Songwon Industrial vs. Hanjoo Light Metal |
| Sam Yang vs. Hanjoo Light Metal | Sam Yang vs. Daou Data Corp | Sam Yang vs. Dongbang Transport Logistics | Sam Yang vs. Nice Information Telecommunication |
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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