Correlation Between DreamCIS and Sam Yang
Can any of the company-specific risk be diversified away by investing in both DreamCIS 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 DreamCIS and Sam Yang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DreamCIS and Sam Yang Foods, you can compare the effects of market volatilities on DreamCIS 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 DreamCIS with a short position of Sam Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of DreamCIS and Sam Yang.
Diversification Opportunities for DreamCIS and Sam Yang
Good diversification
The 3 months correlation between DreamCIS and Sam is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding DreamCIS 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 DreamCIS 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 DreamCIS 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 DreamCIS i.e., DreamCIS and Sam Yang go up and down completely randomly.
Pair Corralation between DreamCIS and Sam Yang
Assuming the 90 days trading horizon DreamCIS is expected to under-perform the Sam Yang. In addition to that, DreamCIS is 1.21 times more volatile than Sam Yang Foods. It trades about -0.31 of its total potential returns per unit of risk. Sam Yang Foods is currently generating about -0.01 per unit of volatility. If you would invest 58,900,000 in Sam Yang Foods on September 5, 2024 and sell it today you would lose (700,000) from holding Sam Yang Foods or give up 1.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DreamCIS vs. Sam Yang Foods
Performance |
| Timeline |
| DreamCIS |
| Sam Yang Foods |
DreamCIS and Sam Yang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DreamCIS and Sam Yang
The main advantage of trading using opposite DreamCIS and Sam Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DreamCIS 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.| DreamCIS vs. LabGenomics Co | DreamCIS vs. ASTORY CoLtd | DreamCIS vs. Daou Data Corp | DreamCIS vs. AnterogenCoLtd |
| Sam Yang vs. LG Display | Sam Yang vs. Hyundai Motor | Sam Yang vs. Hyundai Motor Co | Sam Yang vs. Hyundai Motor 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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