Correlation Between Songwon Industrial and Green Cross
Can any of the company-specific risk be diversified away by investing in both Songwon Industrial and Green Cross 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 Green Cross 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 Green Cross Medical, you can compare the effects of market volatilities on Songwon Industrial and Green Cross 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 Green Cross. Check out your portfolio center. Please also check ongoing floating volatility patterns of Songwon Industrial and Green Cross.
Diversification Opportunities for Songwon Industrial and Green Cross
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Songwon and Green is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Songwon Industrial Co and Green Cross Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Cross Medical 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 Green Cross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Cross Medical has no effect on the direction of Songwon Industrial i.e., Songwon Industrial and Green Cross go up and down completely randomly.
Pair Corralation between Songwon Industrial and Green Cross
Assuming the 90 days trading horizon Songwon Industrial Co is expected to under-perform the Green Cross. In addition to that, Songwon Industrial is 1.35 times more volatile than Green Cross Medical. It trades about -0.3 of its total potential returns per unit of risk. Green Cross Medical is currently generating about -0.15 per unit of volatility. If you would invest 402,000 in Green Cross Medical on August 29, 2024 and sell it today you would lose (29,500) from holding Green Cross Medical or give up 7.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Songwon Industrial Co vs. Green Cross Medical
Performance |
| Timeline |
| Songwon Industrial |
| Green Cross Medical |
Songwon Industrial and Green Cross Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Songwon Industrial and Green Cross
The main advantage of trading using opposite Songwon Industrial and Green Cross positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Songwon Industrial position performs unexpectedly, Green Cross 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 Green Cross will offset losses from the drop in Green Cross' long position.| Songwon Industrial vs. AptaBio Therapeutics | Songwon Industrial vs. Daewoo SBI SPAC | Songwon Industrial vs. Dream Security co | Songwon Industrial vs. Microfriend |
| Green Cross vs. Samsung Electronics Co | Green Cross vs. Samsung Electronics Co | Green Cross vs. LG Energy Solution | Green Cross vs. SK Hynix |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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