Correlation Between Samlip General and Namyang Dairy
Can any of the company-specific risk be diversified away by investing in both Samlip General and Namyang Dairy 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 Namyang Dairy 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 Namyang Dairy, you can compare the effects of market volatilities on Samlip General and Namyang Dairy 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 Namyang Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samlip General and Namyang Dairy.
Diversification Opportunities for Samlip General and Namyang Dairy
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samlip and Namyang is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Samlip General Foods and Namyang Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namyang Dairy 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 Namyang Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namyang Dairy has no effect on the direction of Samlip General i.e., Samlip General and Namyang Dairy go up and down completely randomly.
Pair Corralation between Samlip General and Namyang Dairy
Assuming the 90 days trading horizon Samlip General Foods is expected to generate 1.36 times more return on investment than Namyang Dairy. However, Samlip General is 1.36 times more volatile than Namyang Dairy. It trades about 0.24 of its potential returns per unit of risk. Namyang Dairy is currently generating about -0.09 per unit of risk. If you would invest 4,563,587 in Samlip General Foods on October 12, 2024 and sell it today you would earn a total of 516,413 from holding Samlip General Foods or generate 11.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samlip General Foods vs. Namyang Dairy
Performance |
| Timeline |
| Samlip General Foods |
| Namyang Dairy |
Samlip General and Namyang Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samlip General and Namyang Dairy
The main advantage of trading using opposite Samlip General and Namyang Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samlip General position performs unexpectedly, Namyang Dairy 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 Namyang Dairy will offset losses from the drop in Namyang Dairy's long position.| Samlip General vs. AptaBio Therapeutics | Samlip General vs. Daewoo SBI SPAC | Samlip General vs. Dream Security co | Samlip General vs. Microfriend |
| Namyang Dairy vs. KakaoBank Corp | Namyang Dairy vs. Woori Financial Group | Namyang Dairy vs. Hankuk Steel Wire | Namyang Dairy vs. INSUN Environmental New |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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