Correlation Between Sangsangin Investment and Seoyon Topmetal
Can any of the company-specific risk be diversified away by investing in both Sangsangin Investment and Seoyon Topmetal 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 Seoyon Topmetal 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 Seoyon Topmetal Co, you can compare the effects of market volatilities on Sangsangin Investment and Seoyon Topmetal 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 Seoyon Topmetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangsangin Investment and Seoyon Topmetal.
Diversification Opportunities for Sangsangin Investment and Seoyon Topmetal
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sangsangin and Seoyon is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sangsangin Investment Securiti and Seoyon Topmetal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoyon Topmetal 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 Seoyon Topmetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoyon Topmetal has no effect on the direction of Sangsangin Investment i.e., Sangsangin Investment and Seoyon Topmetal go up and down completely randomly.
Pair Corralation between Sangsangin Investment and Seoyon Topmetal
Assuming the 90 days trading horizon Sangsangin Investment Securities is expected to under-perform the Seoyon Topmetal. But the stock apears to be less risky and, when comparing its historical volatility, Sangsangin Investment Securities is 1.12 times less risky than Seoyon Topmetal. The stock trades about -0.06 of its potential returns per unit of risk. The Seoyon Topmetal Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 463,159 in Seoyon Topmetal Co on October 17, 2024 and sell it today you would lose (103,659) from holding Seoyon Topmetal Co or give up 22.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sangsangin Investment Securiti vs. Seoyon Topmetal Co
Performance |
| Timeline |
| Sangsangin Investment |
| Seoyon Topmetal |
Sangsangin Investment and Seoyon Topmetal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangsangin Investment and Seoyon Topmetal
The main advantage of trading using opposite Sangsangin Investment and Seoyon Topmetal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangsangin Investment position performs unexpectedly, Seoyon Topmetal 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 Seoyon Topmetal will offset losses from the drop in Seoyon Topmetal's long position.| Sangsangin Investment vs. Anam Electronics Co | Sangsangin Investment vs. Display Tech Co | Sangsangin Investment vs. Daewoo Electronic Components | Sangsangin Investment vs. Sungmoon Electronics Co |
| Seoyon Topmetal vs. Woori Technology Investment | Seoyon Topmetal vs. Sangsangin Investment Securities | Seoyon Topmetal vs. DataSolution | Seoyon Topmetal vs. Ssangyong Information Communication |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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