Correlation Between Sangsangin Investment and Dongbang Transport
Can any of the company-specific risk be diversified away by investing in both Sangsangin Investment and Dongbang Transport 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 Sangsangin Investment and Dongbang Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sangsangin Investment Securities and Dongbang Transport Logistics, you can compare the effects of market volatilities on Sangsangin Investment and Dongbang Transport 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 Sangsangin Investment with a short position of Dongbang Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangsangin Investment and Dongbang Transport.
Diversification Opportunities for Sangsangin Investment and Dongbang Transport
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sangsangin and Dongbang is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Sangsangin Investment Securiti and Dongbang Transport Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbang Transport and Sangsangin Investment 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 Sangsangin Investment Securities are associated (or correlated) with Dongbang Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbang Transport has no effect on the direction of Sangsangin Investment i.e., Sangsangin Investment and Dongbang Transport go up and down completely randomly.
Pair Corralation between Sangsangin Investment and Dongbang Transport
Assuming the 90 days trading horizon Sangsangin Investment is expected to generate 2.56 times less return on investment than Dongbang Transport. But when comparing it to its historical volatility, Sangsangin Investment Securities is 2.05 times less risky than Dongbang Transport. It trades about 0.23 of its potential returns per unit of risk. Dongbang Transport Logistics is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 204,000 in Dongbang Transport Logistics on October 11, 2024 and sell it today you would earn a total of 24,500 from holding Dongbang Transport Logistics or generate 12.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sangsangin Investment Securiti vs. Dongbang Transport Logistics
Performance |
| Timeline |
| Sangsangin Investment |
| Dongbang Transport |
Sangsangin Investment and Dongbang Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangsangin Investment and Dongbang Transport
The main advantage of trading using opposite Sangsangin Investment and Dongbang Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangsangin Investment position performs unexpectedly, Dongbang Transport 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 Dongbang Transport will offset losses from the drop in Dongbang Transport's long position.| Sangsangin Investment vs. Samsung Life Insurance | Sangsangin Investment vs. Sangsin Energy Display | Sangsangin Investment vs. TJ media Co | Sangsangin Investment vs. Nasmedia Co |
| Dongbang Transport vs. Sajo Seafood | Dongbang Transport vs. DONGKUK TED METAL | Dongbang Transport vs. Osang Healthcare Co,Ltd | Dongbang Transport vs. Chorokbaem Healthcare 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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