Correlation Between Korea Shipbuilding and Samyang Foods
Can any of the company-specific risk be diversified away by investing in both Korea Shipbuilding 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 Korea Shipbuilding and Samyang Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Shipbuilding Offshore and Samyang Foods Co, you can compare the effects of market volatilities on Korea Shipbuilding 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 Korea Shipbuilding with a short position of Samyang Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Shipbuilding and Samyang Foods.
Diversification Opportunities for Korea Shipbuilding and Samyang Foods
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korea and Samyang is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Korea Shipbuilding Offshore and Samyang Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samyang Foods and Korea Shipbuilding 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 Korea Shipbuilding Offshore 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 Korea Shipbuilding i.e., Korea Shipbuilding and Samyang Foods go up and down completely randomly.
Pair Corralation between Korea Shipbuilding and Samyang Foods
Assuming the 90 days trading horizon Korea Shipbuilding is expected to generate 1.16 times less return on investment than Samyang Foods. But when comparing it to its historical volatility, Korea Shipbuilding Offshore is 1.2 times less risky than Samyang Foods. It trades about 0.16 of its potential returns per unit of risk. Samyang Foods Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 56,800,000 in Samyang Foods Co on October 14, 2024 and sell it today you would earn a total of 18,200,000 from holding Samyang Foods Co or generate 32.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Shipbuilding Offshore vs. Samyang Foods Co
Performance |
| Timeline |
| Korea Shipbuilding |
| Samyang Foods |
Korea Shipbuilding and Samyang Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Shipbuilding and Samyang Foods
The main advantage of trading using opposite Korea Shipbuilding and Samyang Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Shipbuilding 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.| Korea Shipbuilding vs. Daewoo Electronic Components | Korea Shipbuilding vs. Vissem Electronics Co | Korea Shipbuilding vs. TK Chemical | Korea Shipbuilding vs. Hansol Chemical 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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