Correlation Between Samil Enterprise and Yooshin Engineering

Can any of the company-specific risk be diversified away by investing in both Samil Enterprise and Yooshin Engineering 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 Samil Enterprise and Yooshin Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Samil Enterprise Co and Yooshin Engineering, you can compare the effects of market volatilities on Samil Enterprise and Yooshin Engineering 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 Samil Enterprise with a short position of Yooshin Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samil Enterprise and Yooshin Engineering.

Diversification Opportunities for Samil Enterprise and Yooshin Engineering

0.11

Correlation Coefficient

Samil Enterprise  Yooshin Engineering

Average diversification

The 3 months correlation between Samil and Yooshin is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Samil Enterprise Co and Yooshin Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yooshin Engineering and Samil Enterprise 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 Samil Enterprise Co are associated (or correlated) with Yooshin Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yooshin Engineering has no effect on the direction of Samil Enterprise i.e., Samil Enterprise and Yooshin Engineering go up and down completely randomly.

Pair Corralation between Samil Enterprise and Yooshin Engineering

Assuming the 90 days trading horizon Samil Enterprise Co is expected to generate 0.39 times more return on investment than Yooshin Engineering. However, Samil Enterprise Co is 2.57 times less risky than Yooshin Engineering. It trades about 0.27 of its potential returns per unit of risk. Yooshin Engineering is currently generating about 0.03 per unit of risk. If you would invest  285,500  in Samil Enterprise Co on September 12, 2024 and sell it today you would earn a total of  56,000  from holding Samil Enterprise Co or generate 19.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Samil Enterprise Co  vs.  Yooshin Engineering

Samil Enterprise

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Samil Enterprise Co are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samil Enterprise sustained solid returns over the last few months and may actually be approaching a breakup point.

Yooshin Engineering

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Yooshin Engineering are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Yooshin Engineering is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Samil Enterprise and Yooshin Engineering

The main advantage of trading using opposite Samil Enterprise and Yooshin Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samil Enterprise position performs unexpectedly, Yooshin Engineering 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 Yooshin Engineering will offset losses from the drop in Yooshin Engineering's long position.

The idea behind Samil Enterprise Co and Yooshin Engineering pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.