Correlation Between Samhyun Steel and TAEYANG
Can any of the company-specific risk be diversified away by investing in both Samhyun Steel and TAEYANG 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 Samhyun Steel and TAEYANG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samhyun Steel Co and TAEYANG, you can compare the effects of market volatilities on Samhyun Steel and TAEYANG 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 Samhyun Steel with a short position of TAEYANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samhyun Steel and TAEYANG.
Diversification Opportunities for Samhyun Steel and TAEYANG
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samhyun and TAEYANG is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Samhyun Steel Co and TAEYANG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAEYANG and Samhyun Steel 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 Samhyun Steel Co are associated (or correlated) with TAEYANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAEYANG has no effect on the direction of Samhyun Steel i.e., Samhyun Steel and TAEYANG go up and down completely randomly.
Pair Corralation between Samhyun Steel and TAEYANG
Assuming the 90 days trading horizon Samhyun Steel is expected to generate 3.65 times less return on investment than TAEYANG. But when comparing it to its historical volatility, Samhyun Steel Co is 1.24 times less risky than TAEYANG. It trades about 0.05 of its potential returns per unit of risk. TAEYANG is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 615,766 in TAEYANG on October 14, 2024 and sell it today you would earn a total of 24,234 from holding TAEYANG or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samhyun Steel Co vs. TAEYANG
Performance |
| Timeline |
| Samhyun Steel |
| TAEYANG |
Samhyun Steel and TAEYANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samhyun Steel and TAEYANG
The main advantage of trading using opposite Samhyun Steel and TAEYANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samhyun Steel position performs unexpectedly, TAEYANG 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 TAEYANG will offset losses from the drop in TAEYANG's long position.| Samhyun Steel vs. Keum Kang Steel | Samhyun Steel vs. PJ Metal Co | Samhyun Steel vs. Jeil Steel Mfg | Samhyun Steel vs. Daedong Steel Co |
| TAEYANG vs. MEDIANA CoLtd | TAEYANG vs. Seohee Construction Co | TAEYANG vs. GS Engineering Construction | TAEYANG vs. SAMG Entertainment 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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