Correlation Between Daehan Synthetic and SGC Energy
Can any of the company-specific risk be diversified away by investing in both Daehan Synthetic and SGC Energy 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 Daehan Synthetic and SGC Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daehan Synthetic Fiber and SGC Energy Co, you can compare the effects of market volatilities on Daehan Synthetic and SGC Energy 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 Daehan Synthetic with a short position of SGC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daehan Synthetic and SGC Energy.
Diversification Opportunities for Daehan Synthetic and SGC Energy
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Daehan and SGC is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Daehan Synthetic Fiber and SGC Energy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGC Energy and Daehan Synthetic 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 Daehan Synthetic Fiber are associated (or correlated) with SGC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGC Energy has no effect on the direction of Daehan Synthetic i.e., Daehan Synthetic and SGC Energy go up and down completely randomly.
Pair Corralation between Daehan Synthetic and SGC Energy
Assuming the 90 days trading horizon Daehan Synthetic Fiber is expected to generate 0.73 times more return on investment than SGC Energy. However, Daehan Synthetic Fiber is 1.36 times less risky than SGC Energy. It trades about 0.0 of its potential returns per unit of risk. SGC Energy Co is currently generating about -0.01 per unit of risk. If you would invest 11,838,600 in Daehan Synthetic Fiber on September 12, 2024 and sell it today you would lose (738,600) from holding Daehan Synthetic Fiber or give up 6.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Daehan Synthetic Fiber vs. SGC Energy Co
Performance |
| Timeline |
| Daehan Synthetic Fiber |
| SGC Energy |
Daehan Synthetic and SGC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daehan Synthetic and SGC Energy
The main advantage of trading using opposite Daehan Synthetic and SGC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daehan Synthetic position performs unexpectedly, SGC Energy 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 SGC Energy will offset losses from the drop in SGC Energy's long position.| Daehan Synthetic vs. Samsung Electronics Co | Daehan Synthetic vs. Samsung Electronics Co | Daehan Synthetic vs. SK Hynix | Daehan Synthetic vs. POSCO Holdings |
| SGC Energy vs. Hannong Chemicals | SGC Energy vs. EBEST Investment Securities | SGC Energy vs. E Investment Development | SGC Energy vs. Daehan Synthetic Fiber |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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