Correlation Between Hwaseung Industries and Samyang Foods
Can any of the company-specific risk be diversified away by investing in both Hwaseung Industries 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 Hwaseung Industries and Samyang Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hwaseung Industries Co and Samyang Foods Co, you can compare the effects of market volatilities on Hwaseung Industries 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 Hwaseung Industries with a short position of Samyang Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwaseung Industries and Samyang Foods.
Diversification Opportunities for Hwaseung Industries and Samyang Foods
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hwaseung and Samyang is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hwaseung Industries 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 Hwaseung Industries 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 Hwaseung Industries 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 Hwaseung Industries i.e., Hwaseung Industries and Samyang Foods go up and down completely randomly.
Pair Corralation between Hwaseung Industries and Samyang Foods
Assuming the 90 days trading horizon Hwaseung Industries is expected to generate 9.98 times less return on investment than Samyang Foods. But when comparing it to its historical volatility, Hwaseung Industries Co is 2.12 times less risky than Samyang Foods. It trades about 0.02 of its potential returns per unit of risk. Samyang Foods Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 11,687,600 in Samyang Foods Co on September 3, 2024 and sell it today you would earn a total of 40,212,400 from holding Samyang Foods Co or generate 344.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hwaseung Industries Co vs. Samyang Foods Co
Performance |
| Timeline |
| Hwaseung Industries |
| Samyang Foods |
Hwaseung Industries and Samyang Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwaseung Industries and Samyang Foods
The main advantage of trading using opposite Hwaseung Industries and Samyang Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwaseung Industries 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.| Hwaseung Industries vs. Samyang Foods Co | Hwaseung Industries vs. Hankook Furniture Co | Hwaseung Industries vs. CJ Seafood Corp | Hwaseung Industries vs. Sempio Foods Co |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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