Correlation Between Sam Chun and Sangsangin
Can any of the company-specific risk be diversified away by investing in both Sam Chun and Sangsangin 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 Sam Chun and Sangsangin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sam Chun Dang and Sangsangin Co, you can compare the effects of market volatilities on Sam Chun and Sangsangin 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 Sam Chun with a short position of Sangsangin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sam Chun and Sangsangin.
Diversification Opportunities for Sam Chun and Sangsangin
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sam and Sangsangin is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Sam Chun Dang and Sangsangin Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsangin and Sam Chun 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 Sam Chun Dang are associated (or correlated) with Sangsangin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsangin has no effect on the direction of Sam Chun i.e., Sam Chun and Sangsangin go up and down completely randomly.
Pair Corralation between Sam Chun and Sangsangin
Assuming the 90 days trading horizon Sam Chun Dang is expected to generate 2.4 times more return on investment than Sangsangin. However, Sam Chun is 2.4 times more volatile than Sangsangin Co. It trades about 0.07 of its potential returns per unit of risk. Sangsangin Co is currently generating about -0.17 per unit of risk. If you would invest 6,360,000 in Sam Chun Dang on August 25, 2024 and sell it today you would earn a total of 4,620,000 from holding Sam Chun Dang or generate 72.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.62% |
| Values | Daily Returns |
Sam Chun Dang vs. Sangsangin Co
Performance |
| Timeline |
| Sam Chun Dang |
| Sangsangin |
Sam Chun and Sangsangin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sam Chun and Sangsangin
The main advantage of trading using opposite Sam Chun and Sangsangin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sam Chun position performs unexpectedly, Sangsangin 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 Sangsangin will offset losses from the drop in Sangsangin's long position.The idea behind Sam Chun Dang and Sangsangin 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.| Sangsangin vs. Korea Real Estate | Sangsangin vs. Korea Ratings Co | Sangsangin vs. IQuest Co | Sangsangin vs. Wonbang Tech Co |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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