Correlation Between KakaoBank Corp and Samyang Foods
Can any of the company-specific risk be diversified away by investing in both KakaoBank Corp 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 KakaoBank Corp and Samyang Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KakaoBank Corp and Samyang Foods Co, you can compare the effects of market volatilities on KakaoBank Corp 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 KakaoBank Corp with a short position of Samyang Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of KakaoBank Corp and Samyang Foods.
Diversification Opportunities for KakaoBank Corp and Samyang Foods
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KakaoBank and Samyang is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding KakaoBank Corp and Samyang Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samyang Foods and KakaoBank Corp 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 KakaoBank Corp 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 KakaoBank Corp i.e., KakaoBank Corp and Samyang Foods go up and down completely randomly.
Pair Corralation between KakaoBank Corp and Samyang Foods
Assuming the 90 days trading horizon KakaoBank Corp is expected to generate 0.54 times more return on investment than Samyang Foods. However, KakaoBank Corp is 1.86 times less risky than Samyang Foods. It trades about 0.09 of its potential returns per unit of risk. Samyang Foods Co is currently generating about 0.01 per unit of risk. If you would invest 2,165,000 in KakaoBank Corp on September 1, 2024 and sell it today you would earn a total of 70,000 from holding KakaoBank Corp or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KakaoBank Corp vs. Samyang Foods Co
Performance |
| Timeline |
| KakaoBank Corp |
| Samyang Foods |
KakaoBank Corp and Samyang Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KakaoBank Corp and Samyang Foods
The main advantage of trading using opposite KakaoBank Corp and Samyang Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KakaoBank Corp 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.| KakaoBank Corp vs. Shinhan Financial Group | KakaoBank Corp vs. Hana Financial | KakaoBank Corp vs. Woori Financial Group | KakaoBank Corp vs. Industrial Bank |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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