Correlation Between Samlip General and Eugene Technology

Can any of the company-specific risk be diversified away by investing in both Samlip General and Eugene Technology 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 Eugene Technology 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 Eugene Technology CoLtd, you can compare the effects of market volatilities on Samlip General and Eugene Technology 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 Eugene Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samlip General and Eugene Technology.

Diversification Opportunities for Samlip General and Eugene Technology

0.23

Correlation Coefficient

Samlip General  Eugene Technology

Modest diversification

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

Pair Corralation between Samlip General and Eugene Technology

Assuming the 90 days trading horizon Samlip General is expected to generate 3.1 times less return on investment than Eugene Technology. But when comparing it to its historical volatility, Samlip General Foods is 1.61 times less risky than Eugene Technology. It trades about 0.11 of its potential returns per unit of risk. Eugene Technology CoLtd is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  3,165,000  in Eugene Technology CoLtd on December 23, 2024 and sell it today you would earn a total of  1,335,000  from holding Eugene Technology CoLtd or generate 42.18% 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.  Eugene Technology CoLtd

Samlip General Foods

Risk-Adjusted Performance

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 sustained solid returns over the last few months and may actually be approaching a breakup point.

Eugene Technology CoLtd

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eugene Technology CoLtd are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Eugene Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samlip General and Eugene Technology

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

The idea behind Samlip General Foods and Eugene Technology CoLtd 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.