Correlation Between ISE Commerce and Sam Yang

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

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

Diversification Opportunities for ISE Commerce and Sam Yang

-0.48

Correlation Coefficient

ISE Commerce  Sam Yang

Very good diversification

The 3 months correlation between ISE and Sam is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding ISE Commerce and Sam Yang Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sam Yang Foods and ISE Commerce 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 ISE Commerce are associated (or correlated) with Sam Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sam Yang Foods has no effect on the direction of ISE Commerce i.e., ISE Commerce and Sam Yang go up and down completely randomly.

Pair Corralation between ISE Commerce and Sam Yang

Assuming the 90 days trading horizon ISE Commerce is expected to under-perform the Sam Yang. In addition to that, ISE Commerce is 1.43 times more volatile than Sam Yang Foods. It trades about -0.07 of its total potential returns per unit of risk. Sam Yang Foods is currently generating about 0.11 per unit of volatility. If you would invest  11,589,800  in Sam Yang Foods on September 4, 2024 and sell it today you would earn a total of  43,610,200  from holding Sam Yang Foods or generate 376.28% return on investment over 90 days.

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

ISE Commerce  vs.  Sam Yang Foods

ISE Commerce

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ISE Commerce 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.

Sam Yang Foods

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sam Yang Foods are ranked lower than 6 (%) 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.

Pair Trading with ISE Commerce and Sam Yang

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

The idea behind ISE Commerce and Sam Yang Foods 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 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.