Correlation Between Sangsangin Investment and Digital Power
Can any of the company-specific risk be diversified away by investing in both Sangsangin Investment and Digital Power 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 Digital Power 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 Digital Power Communications, you can compare the effects of market volatilities on Sangsangin Investment and Digital Power 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 Digital Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangsangin Investment and Digital Power.
Diversification Opportunities for Sangsangin Investment and Digital Power
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sangsangin and Digital is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Sangsangin Investment Securiti and Digital Power Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Power Commun 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 Digital Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Power Commun has no effect on the direction of Sangsangin Investment i.e., Sangsangin Investment and Digital Power go up and down completely randomly.
Pair Corralation between Sangsangin Investment and Digital Power
Assuming the 90 days trading horizon Sangsangin Investment Securities is expected to under-perform the Digital Power. But the stock apears to be less risky and, when comparing its historical volatility, Sangsangin Investment Securities is 1.54 times less risky than Digital Power. The stock trades about -0.02 of its potential returns per unit of risk. The Digital Power Communications is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 808,000 in Digital Power Communications on August 31, 2024 and sell it today you would lose (1,000.00) from holding Digital Power Communications or give up 0.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sangsangin Investment Securiti vs. Digital Power Communications
Performance |
| Timeline |
| Sangsangin Investment |
| Digital Power Commun |
Sangsangin Investment and Digital Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangsangin Investment and Digital Power
The main advantage of trading using opposite Sangsangin Investment and Digital Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangsangin Investment position performs unexpectedly, Digital Power 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 Digital Power will offset losses from the drop in Digital Power's long position.| Sangsangin Investment vs. Samsung Electronics Co | Sangsangin Investment vs. Samsung Electronics Co | Sangsangin Investment vs. KB Financial Group | Sangsangin Investment vs. Shinhan Financial Group |
| Digital Power vs. AptaBio Therapeutics | Digital Power vs. Daewoo SBI SPAC | Digital Power vs. Dream Security co | Digital Power vs. Microfriend |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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