Correlation Between Keyang Electric and Samyang Foods
Can any of the company-specific risk be diversified away by investing in both Keyang Electric 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 Keyang Electric and Samyang Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keyang Electric Machinery and Samyang Foods Co, you can compare the effects of market volatilities on Keyang Electric 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 Keyang Electric with a short position of Samyang Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keyang Electric and Samyang Foods.
Diversification Opportunities for Keyang Electric and Samyang Foods
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Keyang and Samyang is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Keyang Electric Machinery and Samyang Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samyang Foods and Keyang Electric 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 Keyang Electric Machinery 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 Keyang Electric i.e., Keyang Electric and Samyang Foods go up and down completely randomly.
Pair Corralation between Keyang Electric and Samyang Foods
Assuming the 90 days trading horizon Keyang Electric is expected to generate 8.49 times less return on investment than Samyang Foods. But when comparing it to its historical volatility, Keyang Electric Machinery is 1.2 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 0.17 of returns per unit of risk over similar time horizon. If you would invest 52,100,000 in Samyang Foods Co on October 29, 2024 and sell it today you would earn a total of 18,900,000 from holding Samyang Foods Co or generate 36.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keyang Electric Machinery vs. Samyang Foods Co
Performance |
| Timeline |
| Keyang Electric Machinery |
| Samyang Foods |
Keyang Electric and Samyang Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keyang Electric and Samyang Foods
The main advantage of trading using opposite Keyang Electric and Samyang Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keyang Electric 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.| Keyang Electric vs. Korea Petro Chemical | Keyang Electric vs. Youngchang Chemical Co | Keyang Electric vs. Namhae Chemical | Keyang Electric vs. Kyung In Synthetic Corp |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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