Correlation Between Samsung Electronics and Samyang Foods
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics 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 Samsung Electronics and Samyang Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Electronics Co and Samyang Foods Co, you can compare the effects of market volatilities on Samsung Electronics 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 Samsung Electronics with a short position of Samyang Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Samyang Foods.
Diversification Opportunities for Samsung Electronics and Samyang Foods
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Samyang is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Samyang Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samyang Foods and Samsung Electronics 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 Samsung Electronics Co 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 Samsung Electronics i.e., Samsung Electronics and Samyang Foods go up and down completely randomly.
Pair Corralation between Samsung Electronics and Samyang Foods
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Samyang Foods. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 2.26 times less risky than Samyang Foods. The stock trades about -0.01 of its potential returns per unit of risk. The Samyang Foods Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 12,616,800 in Samyang Foods Co on September 12, 2024 and sell it today you would earn a total of 54,283,200 from holding Samyang Foods Co or generate 430.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Samyang Foods Co
Performance |
| Timeline |
| Samsung Electronics |
| Samyang Foods |
Samsung Electronics and Samyang Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Samyang Foods
The main advantage of trading using opposite Samsung Electronics and Samyang Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics 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.| Samsung Electronics vs. LG Corp | Samsung Electronics vs. Solution Advanced Technology | Samsung Electronics vs. Busan Industrial Co | Samsung Electronics vs. Busan Ind |
| Samyang Foods vs. Samsung Electronics Co | Samyang Foods vs. Samsung Electronics Co | Samyang Foods vs. SK Hynix | Samyang Foods vs. POSCO Holdings |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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