Correlation Between PlayD Co and Samyang Foods
Can any of the company-specific risk be diversified away by investing in both PlayD Co 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 PlayD Co and Samyang Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PlayD Co and Samyang Foods Co, you can compare the effects of market volatilities on PlayD Co 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 PlayD Co with a short position of Samyang Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of PlayD Co and Samyang Foods.
Diversification Opportunities for PlayD Co and Samyang Foods
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PlayD and Samyang is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding PlayD Co and Samyang Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samyang Foods and PlayD Co 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 PlayD Co 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 PlayD Co i.e., PlayD Co and Samyang Foods go up and down completely randomly.
Pair Corralation between PlayD Co and Samyang Foods
Assuming the 90 days trading horizon PlayD Co is expected to generate 3.15 times less return on investment than Samyang Foods. In addition to that, PlayD Co is 1.42 times more volatile than Samyang Foods Co. It trades about 0.03 of its total potential returns per unit of risk. Samyang Foods Co is currently generating about 0.13 per unit of volatility. If you would invest 11,399,600 in Samyang Foods Co on September 26, 2024 and sell it today you would earn a total of 66,900,400 from holding Samyang Foods Co or generate 586.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PlayD Co vs. Samyang Foods Co
Performance |
| Timeline |
| PlayD Co |
| Samyang Foods |
PlayD Co and Samyang Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PlayD Co and Samyang Foods
The main advantage of trading using opposite PlayD Co and Samyang Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PlayD Co 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.| PlayD Co vs. Cube Entertainment | PlayD Co vs. ASTORY CoLtd | PlayD Co vs. Neungyule Education | PlayD Co vs. Korea Investment Holdings |
| Samyang Foods vs. Coloray International Investment | Samyang Foods vs. Sam Yang Foods | Samyang Foods vs. Korea Investment Holdings | Samyang Foods vs. Samlip General Foods |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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