Correlation Between Bohae Brewery and Sangsangin Investment
Can any of the company-specific risk be diversified away by investing in both Bohae Brewery and Sangsangin Investment 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 Bohae Brewery and Sangsangin Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bohae Brewery and Sangsangin Investment Securities, you can compare the effects of market volatilities on Bohae Brewery and Sangsangin Investment 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 Bohae Brewery with a short position of Sangsangin Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bohae Brewery and Sangsangin Investment.
Diversification Opportunities for Bohae Brewery and Sangsangin Investment
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bohae and Sangsangin is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Bohae Brewery and Sangsangin Investment Securiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsangin Investment and Bohae Brewery 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 Bohae Brewery are associated (or correlated) with Sangsangin Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsangin Investment has no effect on the direction of Bohae Brewery i.e., Bohae Brewery and Sangsangin Investment go up and down completely randomly.
Pair Corralation between Bohae Brewery and Sangsangin Investment
Assuming the 90 days trading horizon Bohae Brewery is expected to generate 1.16 times more return on investment than Sangsangin Investment. However, Bohae Brewery is 1.16 times more volatile than Sangsangin Investment Securities. It trades about -0.03 of its potential returns per unit of risk. Sangsangin Investment Securities is currently generating about -0.08 per unit of risk. If you would invest 67,700 in Bohae Brewery on September 1, 2024 and sell it today you would lose (21,100) from holding Bohae Brewery or give up 31.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bohae Brewery vs. Sangsangin Investment Securiti
Performance |
| Timeline |
| Bohae Brewery |
| Sangsangin Investment |
Bohae Brewery and Sangsangin Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bohae Brewery and Sangsangin Investment
The main advantage of trading using opposite Bohae Brewery and Sangsangin Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bohae Brewery position performs unexpectedly, Sangsangin Investment 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 Investment will offset losses from the drop in Sangsangin Investment's long position.| Bohae Brewery vs. Korea Real Estate | Bohae Brewery vs. Korea Ratings Co | Bohae Brewery vs. IQuest Co | Bohae Brewery vs. Wonbang Tech Co |
| Sangsangin Investment vs. Samsung Electronics Co | Sangsangin Investment vs. Samsung Electronics Co | Sangsangin Investment vs. KB Financial Group | Sangsangin Investment vs. Shinhan Financial Group |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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