Correlation Between Samji Electronics and FoodNamoo
Can any of the company-specific risk be diversified away by investing in both Samji Electronics and FoodNamoo 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 Samji Electronics and FoodNamoo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samji Electronics Co and FoodNamoo, you can compare the effects of market volatilities on Samji Electronics and FoodNamoo 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 Samji Electronics with a short position of FoodNamoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samji Electronics and FoodNamoo.
Diversification Opportunities for Samji Electronics and FoodNamoo
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Samji and FoodNamoo is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Samji Electronics Co and FoodNamoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FoodNamoo and Samji 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 Samji Electronics Co are associated (or correlated) with FoodNamoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FoodNamoo has no effect on the direction of Samji Electronics i.e., Samji Electronics and FoodNamoo go up and down completely randomly.
Pair Corralation between Samji Electronics and FoodNamoo
Assuming the 90 days trading horizon Samji Electronics Co is expected to generate 0.46 times more return on investment than FoodNamoo. However, Samji Electronics Co is 2.16 times less risky than FoodNamoo. It trades about 0.2 of its potential returns per unit of risk. FoodNamoo is currently generating about -0.09 per unit of risk. If you would invest 826,000 in Samji Electronics Co on October 11, 2024 and sell it today you would earn a total of 44,000 from holding Samji Electronics Co or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samji Electronics Co vs. FoodNamoo
Performance |
| Timeline |
| Samji Electronics |
| FoodNamoo |
Samji Electronics and FoodNamoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samji Electronics and FoodNamoo
The main advantage of trading using opposite Samji Electronics and FoodNamoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samji Electronics position performs unexpectedly, FoodNamoo 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 FoodNamoo will offset losses from the drop in FoodNamoo's long position.| Samji Electronics vs. SFA Semicon Co | Samji Electronics vs. Seronics Co | Samji Electronics vs. COWELL FASHION CoLtd | Samji Electronics vs. Seohee Construction Co |
| FoodNamoo vs. Anam Electronics Co | FoodNamoo vs. Daewoo Electronic Components | FoodNamoo vs. Jeong Moon Information | FoodNamoo vs. Samji Electronics 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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