Correlation Between Chin Yang and Samsung Card

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

By analyzing existing cross correlation between Chin Yang Chemical and Samsung Card Co, you can compare the effects of market volatilities on Chin Yang and Samsung Card 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 Chin Yang with a short position of Samsung Card. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chin Yang and Samsung Card.

Diversification Opportunities for Chin Yang and Samsung Card

0.43

Correlation Coefficient

Chin Yang  Samsung Card

Very weak diversification

The 3 months correlation between Chin and Samsung is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Chin Yang Chemical and Samsung Card Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Card and Chin Yang 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 Chin Yang Chemical are associated (or correlated) with Samsung Card. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Card has no effect on the direction of Chin Yang i.e., Chin Yang and Samsung Card go up and down completely randomly.

Pair Corralation between Chin Yang and Samsung Card

Assuming the 90 days trading horizon Chin Yang Chemical is expected to generate 5.66 times more return on investment than Samsung Card. However, Chin Yang is 5.66 times more volatile than Samsung Card Co. It trades about 0.2 of its potential returns per unit of risk. Samsung Card Co is currently generating about 0.07 per unit of risk. If you would invest  218,500  in Chin Yang Chemical on December 1, 2024 and sell it today you would earn a total of  239,000  from holding Chin Yang Chemical or generate 109.38% return on investment over 90 days.

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

Chin Yang Chemical  vs.  Samsung Card Co

Chin Yang Chemical

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chin Yang Chemical are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Chin Yang sustained solid returns over the last few months and may actually be approaching a breakup point.

Samsung Card

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Card Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samsung Card may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Chin Yang and Samsung Card

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

The idea behind Chin Yang Chemical and Samsung Card Co 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.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.