Correlation Between Sam Yang and SHINWON STRUCTION

Can any of the company-specific risk be diversified away by investing in both Sam Yang and SHINWON STRUCTION 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 Sam Yang and SHINWON STRUCTION into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sam Yang Foods and SHINWON STRUCTION COMPANY, you can compare the effects of market volatilities on Sam Yang and SHINWON STRUCTION 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 Sam Yang with a short position of SHINWON STRUCTION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sam Yang and SHINWON STRUCTION.

Diversification Opportunities for Sam Yang and SHINWON STRUCTION

-0.54

Correlation Coefficient

Sam Yang  SHINWON STRUCTION

Excellent diversification

The 3 months correlation between Sam and SHINWON is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Sam Yang Foods and SHINWON STRUCTION COMPANY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHINWON STRUCTION PANY and Sam Yang 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 Sam Yang Foods are associated (or correlated) with SHINWON STRUCTION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHINWON STRUCTION PANY has no effect on the direction of Sam Yang i.e., Sam Yang and SHINWON STRUCTION go up and down completely randomly.

Pair Corralation between Sam Yang and SHINWON STRUCTION

Assuming the 90 days trading horizon Sam Yang Foods is expected to generate 0.67 times more return on investment than SHINWON STRUCTION. However, Sam Yang Foods is 1.5 times less risky than SHINWON STRUCTION. It trades about 0.37 of its potential returns per unit of risk. SHINWON STRUCTION COMPANY is currently generating about -0.07 per unit of risk. If you would invest  52,900,000  in Sam Yang Foods on September 15, 2024 and sell it today you would earn a total of  15,800,000  from holding Sam Yang Foods or generate 29.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Sam Yang Foods  vs.  SHINWON STRUCTION COMPANY

Sam Yang Foods

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sam Yang Foods are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sam Yang sustained solid returns over the last few months and may actually be approaching a breakup point.

SHINWON STRUCTION PANY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SHINWON STRUCTION COMPANY has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Sam Yang and SHINWON STRUCTION

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

The idea behind Sam Yang Foods and SHINWON STRUCTION COMPANY 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.