Correlation Between Songwon Industrial and Korea Alcohol
Can any of the company-specific risk be diversified away by investing in both Songwon Industrial and Korea Alcohol 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 Songwon Industrial and Korea Alcohol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Songwon Industrial Co and Korea Alcohol Industrial, you can compare the effects of market volatilities on Songwon Industrial and Korea Alcohol 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 Songwon Industrial with a short position of Korea Alcohol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Songwon Industrial and Korea Alcohol.
Diversification Opportunities for Songwon Industrial and Korea Alcohol
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Songwon and Korea is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Songwon Industrial Co and Korea Alcohol Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Alcohol Industrial and Songwon Industrial 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 Songwon Industrial Co are associated (or correlated) with Korea Alcohol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Alcohol Industrial has no effect on the direction of Songwon Industrial i.e., Songwon Industrial and Korea Alcohol go up and down completely randomly.
Pair Corralation between Songwon Industrial and Korea Alcohol
Assuming the 90 days trading horizon Songwon Industrial Co is expected to under-perform the Korea Alcohol. In addition to that, Songwon Industrial is 1.94 times more volatile than Korea Alcohol Industrial. It trades about -0.06 of its total potential returns per unit of risk. Korea Alcohol Industrial is currently generating about -0.1 per unit of volatility. If you would invest 1,059,000 in Korea Alcohol Industrial on September 3, 2024 and sell it today you would lose (200,000) from holding Korea Alcohol Industrial or give up 18.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Songwon Industrial Co vs. Korea Alcohol Industrial
Performance |
| Timeline |
| Songwon Industrial |
| Korea Alcohol Industrial |
Songwon Industrial and Korea Alcohol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Songwon Industrial and Korea Alcohol
The main advantage of trading using opposite Songwon Industrial and Korea Alcohol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Songwon Industrial position performs unexpectedly, Korea Alcohol 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 Korea Alcohol will offset losses from the drop in Korea Alcohol's long position.| Songwon Industrial vs. AptaBio Therapeutics | Songwon Industrial vs. Daewoo SBI SPAC | Songwon Industrial vs. Dream Security co | Songwon Industrial vs. Microfriend |
| Korea Alcohol vs. KMH Hitech Co | Korea Alcohol vs. Songwon Industrial Co | Korea Alcohol vs. Cots Technology Co | Korea Alcohol vs. Korea Shipbuilding Offshore |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |