Correlation Between Samlip General and Taegu Broadcasting

Can any of the company-specific risk be diversified away by investing in both Samlip General and Taegu Broadcasting 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 Samlip General and Taegu Broadcasting into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Samlip General and Taegu Broadcasting

0.23

Correlation Coefficient

Samlip General  Taegu Broadcasting

Modest diversification

The 3 months correlation between Samlip and Taegu is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Samlip General Foods and Taegu Broadcasting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taegu Broadcasting and Samlip General 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 Samlip General Foods are associated (or correlated) with Taegu Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taegu Broadcasting has no effect on the direction of Samlip General i.e., Samlip General and Taegu Broadcasting go up and down completely randomly.

Pair Corralation between Samlip General and Taegu Broadcasting

Assuming the 90 days trading horizon Samlip General Foods is expected to generate 0.98 times more return on investment than Taegu Broadcasting. However, Samlip General Foods is 1.03 times less risky than Taegu Broadcasting. It trades about 0.57 of its potential returns per unit of risk. Taegu Broadcasting is currently generating about -0.13 per unit of risk. If you would invest  4,370,214  in Samlip General Foods on October 10, 2024 and sell it today you would earn a total of  1,019,786  from holding Samlip General Foods or generate 23.33% return on investment over 90 days.

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

Samlip General Foods  vs.  Taegu Broadcasting

Samlip General Foods

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Samlip General Foods are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samlip General may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Taegu Broadcasting

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Taegu Broadcasting are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Taegu Broadcasting may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Samlip General and Taegu Broadcasting

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

The idea behind Samlip General Foods and Taegu Broadcasting 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.