Correlation Between Korea Investment and Sam Yang
Can any of the company-specific risk be diversified away by investing in both Korea Investment and Sam Yang 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 Investment and Sam Yang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Investment Holdings and Sam Yang Foods, you can compare the effects of market volatilities on Korea Investment and Sam Yang 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 Investment with a short position of Sam Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Investment and Sam Yang.
Diversification Opportunities for Korea Investment and Sam Yang
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Korea and Sam is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Korea Investment Holdings and Sam Yang Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sam Yang Foods and Korea Investment 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 Investment Holdings are associated (or correlated) with Sam Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sam Yang Foods has no effect on the direction of Korea Investment i.e., Korea Investment and Sam Yang go up and down completely randomly.
Pair Corralation between Korea Investment and Sam Yang
Assuming the 90 days trading horizon Korea Investment is expected to generate 9.77 times less return on investment than Sam Yang. But when comparing it to its historical volatility, Korea Investment Holdings is 2.53 times less risky than Sam Yang. It trades about 0.03 of its potential returns per unit of risk. Sam Yang Foods is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 11,743,600 in Sam Yang Foods on October 18, 2024 and sell it today you would earn a total of 63,756,400 from holding Sam Yang Foods or generate 542.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Investment Holdings vs. Sam Yang Foods
Performance |
| Timeline |
| Korea Investment Holdings |
| Sam Yang Foods |
Korea Investment and Sam Yang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Investment and Sam Yang
The main advantage of trading using opposite Korea Investment and Sam Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Investment position performs unexpectedly, Sam Yang 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 Sam Yang will offset losses from the drop in Sam Yang's long position.| Korea Investment vs. Korean Reinsurance Co | Korea Investment vs. Wireless Power Amplifier | Korea Investment vs. Hana Financial | Korea Investment vs. Clean Science co |
| Sam Yang vs. Golden Bridge Investment | Sam Yang vs. Korea Investment Holdings | Sam Yang vs. TS Investment Corp | Sam Yang vs. CU Medical Systems |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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