Correlation Between Sangsangin Investment and Seoul Electronics
Can any of the company-specific risk be diversified away by investing in both Sangsangin Investment and Seoul Electronics 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 Seoul Electronics 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 Seoul Electronics Telecom, you can compare the effects of market volatilities on Sangsangin Investment and Seoul Electronics 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 Seoul Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangsangin Investment and Seoul Electronics.
Diversification Opportunities for Sangsangin Investment and Seoul Electronics
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sangsangin and Seoul is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sangsangin Investment Securiti and Seoul Electronics Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Electronics Telecom 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 Seoul Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Electronics Telecom has no effect on the direction of Sangsangin Investment i.e., Sangsangin Investment and Seoul Electronics go up and down completely randomly.
Pair Corralation between Sangsangin Investment and Seoul Electronics
Assuming the 90 days trading horizon Sangsangin Investment Securities is expected to under-perform the Seoul Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Sangsangin Investment Securities is 2.09 times less risky than Seoul Electronics. The stock trades about -0.2 of its potential returns per unit of risk. The Seoul Electronics Telecom is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 37,000 in Seoul Electronics Telecom on August 28, 2024 and sell it today you would lose (11,700) from holding Seoul Electronics Telecom or give up 31.62% 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. Seoul Electronics Telecom
Performance |
| Timeline |
| Sangsangin Investment |
| Seoul Electronics Telecom |
Sangsangin Investment and Seoul Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangsangin Investment and Seoul Electronics
The main advantage of trading using opposite Sangsangin Investment and Seoul Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangsangin Investment position performs unexpectedly, Seoul Electronics 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 Seoul Electronics will offset losses from the drop in Seoul Electronics' long position.| Sangsangin Investment vs. Korea New Network | Sangsangin Investment vs. Dong A Eltek | Sangsangin Investment vs. Dreamus Company | Sangsangin Investment vs. SK Bioscience Co |
| Seoul Electronics vs. Nh Investment And | Seoul Electronics vs. Mobile Appliance | Seoul Electronics vs. TS Investment Corp | Seoul Electronics vs. Sangsangin Investment Securities |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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