Correlation Between Samlip General and Samyang Foods
Can any of the company-specific risk be diversified away by investing in both Samlip General and Samyang Foods 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 Samlip General and Samyang Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samlip General Foods and Samyang Foods Co, you can compare the effects of market volatilities on Samlip General and Samyang Foods 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 Samlip General with a short position of Samyang Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samlip General and Samyang Foods.
Diversification Opportunities for Samlip General and Samyang Foods
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samlip and Samyang is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Samlip General Foods and Samyang Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samyang Foods and Samlip General 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 Samlip General Foods are associated (or correlated) with Samyang Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samyang Foods has no effect on the direction of Samlip General i.e., Samlip General and Samyang Foods go up and down completely randomly.
Pair Corralation between Samlip General and Samyang Foods
Assuming the 90 days trading horizon Samlip General Foods is expected to generate 0.95 times more return on investment than Samyang Foods. However, Samlip General Foods is 1.05 times less risky than Samyang Foods. It trades about 0.19 of its potential returns per unit of risk. Samyang Foods Co is currently generating about 0.07 per unit of risk. If you would invest 4,698,947 in Samlip General Foods on October 15, 2024 and sell it today you would earn a total of 381,053 from holding Samlip General Foods or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samlip General Foods vs. Samyang Foods Co
Performance |
| Timeline |
| Samlip General Foods |
| Samyang Foods |
Samlip General and Samyang Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samlip General and Samyang Foods
The main advantage of trading using opposite Samlip General and Samyang Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samlip General position performs unexpectedly, Samyang Foods 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 Samyang Foods will offset losses from the drop in Samyang Foods' long position.| Samlip General vs. LG Chemicals | Samlip General vs. Daejung Chemicals Metals | Samlip General vs. Nam Hwa Construction | Samlip General vs. Miwon Chemicals Co |
| Samyang Foods vs. Korea Shipbuilding Offshore | Samyang Foods vs. DRB Industrial Co | Samyang Foods vs. Dongil Metal Co | Samyang Foods vs. Shinil Industrial 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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