Correlation Between Daehan Steel and Samyang Foods
Can any of the company-specific risk be diversified away by investing in both Daehan Steel 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 Daehan Steel and Samyang Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daehan Steel and Samyang Foods Co, you can compare the effects of market volatilities on Daehan Steel 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 Daehan Steel with a short position of Samyang Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daehan Steel and Samyang Foods.
Diversification Opportunities for Daehan Steel and Samyang Foods
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daehan and Samyang is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Daehan Steel and Samyang Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samyang Foods and Daehan 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 Daehan Steel 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 Daehan Steel i.e., Daehan Steel and Samyang Foods go up and down completely randomly.
Pair Corralation between Daehan Steel and Samyang Foods
Assuming the 90 days trading horizon Daehan Steel is expected to generate 0.76 times more return on investment than Samyang Foods. However, Daehan Steel is 1.31 times less risky than Samyang Foods. It trades about 0.27 of its potential returns per unit of risk. Samyang Foods Co is currently generating about 0.04 per unit of risk. If you would invest 1,332,000 in Daehan Steel on August 31, 2024 and sell it today you would earn a total of 224,000 from holding Daehan Steel or generate 16.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daehan Steel vs. Samyang Foods Co
Performance |
| Timeline |
| Daehan Steel |
| Samyang Foods |
Daehan Steel and Samyang Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daehan Steel and Samyang Foods
The main advantage of trading using opposite Daehan Steel and Samyang Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daehan Steel 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.| Daehan Steel vs. Woori Technology Investment | Daehan Steel vs. Stic Investments | Daehan Steel vs. Hansol Homedeco Co | Daehan Steel vs. Lotte Chilsung Beverage |
| Samyang Foods vs. AptaBio Therapeutics | Samyang Foods vs. Daewoo SBI SPAC | Samyang Foods vs. Dream Security co | Samyang Foods vs. Microfriend |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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