Correlation Between SH Energy and Vissem Electronics
Can any of the company-specific risk be diversified away by investing in both SH Energy and Vissem 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 SH Energy and Vissem Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SH Energy Chemical and Vissem Electronics Co, you can compare the effects of market volatilities on SH Energy and Vissem 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 SH Energy with a short position of Vissem Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SH Energy and Vissem Electronics.
Diversification Opportunities for SH Energy and Vissem Electronics
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 002360 and Vissem is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding SH Energy Chemical and Vissem Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vissem Electronics and SH Energy 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 SH Energy Chemical are associated (or correlated) with Vissem Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vissem Electronics has no effect on the direction of SH Energy i.e., SH Energy and Vissem Electronics go up and down completely randomly.
Pair Corralation between SH Energy and Vissem Electronics
Assuming the 90 days trading horizon SH Energy Chemical is expected to generate 1.54 times more return on investment than Vissem Electronics. However, SH Energy is 1.54 times more volatile than Vissem Electronics Co. It trades about 0.07 of its potential returns per unit of risk. Vissem Electronics Co is currently generating about -0.02 per unit of risk. If you would invest 50,300 in SH Energy Chemical on October 28, 2024 and sell it today you would earn a total of 1,300 from holding SH Energy Chemical or generate 2.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SH Energy Chemical vs. Vissem Electronics Co
Performance |
| Timeline |
| SH Energy Chemical |
| Vissem Electronics |
SH Energy and Vissem Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SH Energy and Vissem Electronics
The main advantage of trading using opposite SH Energy and Vissem Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SH Energy position performs unexpectedly, Vissem 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 Vissem Electronics will offset losses from the drop in Vissem Electronics' long position.| SH Energy vs. Samyoung Electronics Co | SH Energy vs. Seohee Construction Co | SH Energy vs. Camus Engineering Construction | SH Energy vs. Dongbang Ship Machinery |
| Vissem Electronics vs. Aprogen Healthcare Games | Vissem Electronics vs. Kukdong Oil Chemicals | Vissem Electronics vs. Puloon Technology | Vissem Electronics vs. KG Eco Technology |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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