Correlation Between Sangsangin Investment and Daejung Chemicals
Can any of the company-specific risk be diversified away by investing in both Sangsangin Investment and Daejung Chemicals 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 Daejung Chemicals 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 Daejung Chemicals Metals, you can compare the effects of market volatilities on Sangsangin Investment and Daejung Chemicals 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 Daejung Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangsangin Investment and Daejung Chemicals.
Diversification Opportunities for Sangsangin Investment and Daejung Chemicals
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sangsangin and Daejung is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sangsangin Investment Securiti and Daejung Chemicals Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daejung Chemicals Metals 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 Daejung Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daejung Chemicals Metals has no effect on the direction of Sangsangin Investment i.e., Sangsangin Investment and Daejung Chemicals go up and down completely randomly.
Pair Corralation between Sangsangin Investment and Daejung Chemicals
Assuming the 90 days trading horizon Sangsangin Investment Securities is expected to under-perform the Daejung Chemicals. In addition to that, Sangsangin Investment is 1.04 times more volatile than Daejung Chemicals Metals. It trades about -0.05 of its total potential returns per unit of risk. Daejung Chemicals Metals is currently generating about 0.14 per unit of volatility. If you would invest 1,274,795 in Daejung Chemicals Metals on October 22, 2024 and sell it today you would earn a total of 28,205 from holding Daejung Chemicals Metals or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sangsangin Investment Securiti vs. Daejung Chemicals Metals
Performance |
| Timeline |
| Sangsangin Investment |
| Daejung Chemicals Metals |
Sangsangin Investment and Daejung Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangsangin Investment and Daejung Chemicals
The main advantage of trading using opposite Sangsangin Investment and Daejung Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangsangin Investment position performs unexpectedly, Daejung Chemicals 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 Daejung Chemicals will offset losses from the drop in Daejung Chemicals' long position.| Sangsangin Investment vs. Hotel Shilla Co | Sangsangin Investment vs. LB Investment | Sangsangin Investment vs. Industrial Bank | Sangsangin Investment vs. Settlebank |
| Daejung Chemicals vs. MetaLabs Co | Daejung Chemicals vs. LB Investment | Daejung Chemicals vs. PJ Metal Co | Daejung Chemicals vs. Dongil Metal 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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