Correlation Between Microfriend and Samyoung M
Can any of the company-specific risk be diversified away by investing in both Microfriend and Samyoung M 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 Microfriend and Samyoung M into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microfriend and Samyoung M Tek Co, you can compare the effects of market volatilities on Microfriend and Samyoung M 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 Microfriend with a short position of Samyoung M. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microfriend and Samyoung M.
Diversification Opportunities for Microfriend and Samyoung M
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Microfriend and Samyoung is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Microfriend and Samyoung M Tek Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samyoung M Tek and Microfriend 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 Microfriend are associated (or correlated) with Samyoung M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samyoung M Tek has no effect on the direction of Microfriend i.e., Microfriend and Samyoung M go up and down completely randomly.
Pair Corralation between Microfriend and Samyoung M
Assuming the 90 days trading horizon Microfriend is expected to generate 1.54 times more return on investment than Samyoung M. However, Microfriend is 1.54 times more volatile than Samyoung M Tek Co. It trades about 0.2 of its potential returns per unit of risk. Samyoung M Tek Co is currently generating about 0.18 per unit of risk. If you would invest 263,500 in Microfriend on November 27, 2024 and sell it today you would earn a total of 37,500 from holding Microfriend or generate 14.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Microfriend vs. Samyoung M Tek Co
Performance |
| Timeline |
| Microfriend |
| Samyoung M Tek |
Microfriend and Samyoung M Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microfriend and Samyoung M
The main advantage of trading using opposite Microfriend and Samyoung M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microfriend position performs unexpectedly, Samyoung M 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 Samyoung M will offset losses from the drop in Samyoung M's long position.| Microfriend vs. LG Household Healthcare | Microfriend vs. Seoul Electronics Telecom | Microfriend vs. Kisan Telecom Co | Microfriend vs. Korea Information Communications |
| Samyoung M vs. Kakao Games Corp | Samyoung M vs. KakaoBank Corp | Samyoung M vs. Koryo Credit Information | Samyoung M vs. Hanwha Life Insurance |
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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