Correlation Between Shinsegae Food and Samlip General

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

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

Diversification Opportunities for Shinsegae Food and Samlip General

0.1

Correlation Coefficient

Shinsegae Food  Samlip General

Average diversification

The 3 months correlation between Shinsegae and Samlip is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Food and Samlip General Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samlip General Foods and Shinsegae Food 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 Shinsegae Food are associated (or correlated) with Samlip General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samlip General Foods has no effect on the direction of Shinsegae Food i.e., Shinsegae Food and Samlip General go up and down completely randomly.

Pair Corralation between Shinsegae Food and Samlip General

Assuming the 90 days trading horizon Shinsegae Food is expected to under-perform the Samlip General. But the stock apears to be less risky and, when comparing its historical volatility, Shinsegae Food is 1.09 times less risky than Samlip General. The stock trades about -0.17 of its potential returns per unit of risk. The Samlip General Foods is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  4,960,000  in Samlip General Foods on December 26, 2024 and sell it today you would earn a total of  1,050,000  from holding Samlip General Foods or generate 21.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.28%
Values	Daily Returns

Shinsegae Food  vs.  Samlip General Foods

Shinsegae Food

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shinsegae Food 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Samlip General Foods

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Samlip General Foods are ranked lower than 12 (%) 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.

Pair Trading with Shinsegae Food and Samlip General

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

The idea behind Shinsegae Food and Samlip General 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.