Correlation Between IL Science and Samyang Foods
Can any of the company-specific risk be diversified away by investing in both IL Science 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 IL Science and Samyang Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IL Science Co and Samyang Foods Co, you can compare the effects of market volatilities on IL Science 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 IL Science with a short position of Samyang Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of IL Science and Samyang Foods.
Diversification Opportunities for IL Science and Samyang Foods
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between 307180 and Samyang is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding IL Science 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 IL Science 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 IL Science 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 IL Science i.e., IL Science and Samyang Foods go up and down completely randomly.
Pair Corralation between IL Science and Samyang Foods
Assuming the 90 days trading horizon IL Science Co is expected to under-perform the Samyang Foods. But the stock apears to be less risky and, when comparing its historical volatility, IL Science Co is 1.24 times less risky than Samyang Foods. The stock trades about -0.18 of its potential returns per unit of risk. The Samyang Foods Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 52,000,000 in Samyang Foods Co on September 1, 2024 and sell it today you would lose (100,000) from holding Samyang Foods Co or give up 0.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
IL Science Co vs. Samyang Foods Co
Performance |
| Timeline |
| IL Science |
| Samyang Foods |
IL Science and Samyang Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IL Science and Samyang Foods
The main advantage of trading using opposite IL Science and Samyang Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IL Science 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.| IL Science vs. Samyang Foods Co | IL Science vs. Foodnamoo | IL Science vs. Nice Information Telecommunication | IL Science vs. Samlip General Foods |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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