Correlation Between Sangsangin Investment and DIGITAL CHOSUN
Can any of the company-specific risk be diversified away by investing in both Sangsangin Investment and DIGITAL CHOSUN 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 CHOSUN 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 CHOSUN, you can compare the effects of market volatilities on Sangsangin Investment and DIGITAL CHOSUN 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 CHOSUN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangsangin Investment and DIGITAL CHOSUN.
Diversification Opportunities for Sangsangin Investment and DIGITAL CHOSUN
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sangsangin and DIGITAL is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sangsangin Investment Securiti and DIGITAL CHOSUN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIGITAL CHOSUN 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 CHOSUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIGITAL CHOSUN has no effect on the direction of Sangsangin Investment i.e., Sangsangin Investment and DIGITAL CHOSUN go up and down completely randomly.
Pair Corralation between Sangsangin Investment and DIGITAL CHOSUN
Assuming the 90 days trading horizon Sangsangin Investment Securities is expected to under-perform the DIGITAL CHOSUN. But the stock apears to be less risky and, when comparing its historical volatility, Sangsangin Investment Securities is 2.01 times less risky than DIGITAL CHOSUN. The stock trades about -0.18 of its potential returns per unit of risk. The DIGITAL CHOSUN is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 196,723 in DIGITAL CHOSUN on November 7, 2024 and sell it today you would lose (28,523) from holding DIGITAL CHOSUN or give up 14.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.49% |
| Values | Daily Returns |
Sangsangin Investment Securiti vs. DIGITAL CHOSUN
Performance |
| Timeline |
| Sangsangin Investment |
| DIGITAL CHOSUN |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sangsangin Investment and DIGITAL CHOSUN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangsangin Investment and DIGITAL CHOSUN
The main advantage of trading using opposite Sangsangin Investment and DIGITAL CHOSUN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangsangin Investment position performs unexpectedly, DIGITAL CHOSUN 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 CHOSUN will offset losses from the drop in DIGITAL CHOSUN's long position.| Sangsangin Investment vs. Duksan Hi Metal | Sangsangin Investment vs. Hankook Furniture Co | Sangsangin Investment vs. Kukil Metal Co | Sangsangin Investment vs. Hanjin Transportation Co |
| DIGITAL CHOSUN vs. Sempio Foods Co | DIGITAL CHOSUN vs. Daishin Information Communications | DIGITAL CHOSUN vs. CKH Food Health | DIGITAL CHOSUN vs. Samlip General Foods |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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