Correlation Between Songwon Industrial and UNISEM
Can any of the company-specific risk be diversified away by investing in both Songwon Industrial and UNISEM 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 UNISEM 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 UNISEM Co, you can compare the effects of market volatilities on Songwon Industrial and UNISEM 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 UNISEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Songwon Industrial and UNISEM.
Diversification Opportunities for Songwon Industrial and UNISEM
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Songwon and UNISEM is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Songwon Industrial Co and UNISEM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNISEM 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 UNISEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNISEM has no effect on the direction of Songwon Industrial i.e., Songwon Industrial and UNISEM go up and down completely randomly.
Pair Corralation between Songwon Industrial and UNISEM
Assuming the 90 days trading horizon Songwon Industrial is expected to generate 1.01 times less return on investment than UNISEM. In addition to that, Songwon Industrial is 1.09 times more volatile than UNISEM Co. It trades about 0.24 of its total potential returns per unit of risk. UNISEM Co is currently generating about 0.26 per unit of volatility. If you would invest 586,849 in UNISEM Co on October 24, 2024 and sell it today you would earn a total of 69,151 from holding UNISEM Co or generate 11.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Songwon Industrial Co vs. UNISEM Co
Performance |
| Timeline |
| Songwon Industrial |
| UNISEM |
Songwon Industrial and UNISEM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Songwon Industrial and UNISEM
The main advantage of trading using opposite Songwon Industrial and UNISEM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Songwon Industrial position performs unexpectedly, UNISEM 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 UNISEM will offset losses from the drop in UNISEM's long position.| Songwon Industrial vs. AptaBio Therapeutics | Songwon Industrial vs. Daewoo SBI SPAC | Songwon Industrial vs. Dream Security co | Songwon Industrial vs. Microfriend |
| UNISEM vs. Samick Musical Instruments | UNISEM vs. Daeduck Electronics Co | UNISEM vs. Display Tech Co | UNISEM vs. Shinil Electronics 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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