Correlation Between Samyung Trading and ABCO Electronics
Can any of the company-specific risk be diversified away by investing in both Samyung Trading and ABCO Electronics 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 Samyung Trading and ABCO Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samyung Trading Co and ABCO Electronics Co, you can compare the effects of market volatilities on Samyung Trading and ABCO Electronics 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 Samyung Trading with a short position of ABCO Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samyung Trading and ABCO Electronics.
Diversification Opportunities for Samyung Trading and ABCO Electronics
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samyung and ABCO is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Samyung Trading Co and ABCO Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABCO Electronics and Samyung Trading 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 Samyung Trading Co are associated (or correlated) with ABCO Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABCO Electronics has no effect on the direction of Samyung Trading i.e., Samyung Trading and ABCO Electronics go up and down completely randomly.
Pair Corralation between Samyung Trading and ABCO Electronics
Assuming the 90 days trading horizon Samyung Trading Co is expected to generate 0.23 times more return on investment than ABCO Electronics. However, Samyung Trading Co is 4.27 times less risky than ABCO Electronics. It trades about 0.09 of its potential returns per unit of risk. ABCO Electronics Co is currently generating about -0.09 per unit of risk. If you would invest 1,269,000 in Samyung Trading Co on September 23, 2024 and sell it today you would earn a total of 36,000 from holding Samyung Trading Co or generate 2.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Samyung Trading Co vs. ABCO Electronics Co
Performance |
Timeline |
Samyung Trading |
ABCO Electronics |
Samyung Trading and ABCO Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samyung Trading and ABCO Electronics
The main advantage of trading using opposite Samyung Trading and ABCO Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samyung Trading position performs unexpectedly, ABCO Electronics 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 ABCO Electronics will offset losses from the drop in ABCO Electronics' long position.Samyung Trading vs. Woorim Machinery Co | Samyung Trading vs. SEOJEON ELECTRIC MACHINERY | Samyung Trading vs. Shinsegae Information Communication | Samyung Trading vs. Mobileleader CoLtd |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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