Correlation Between Songwon Industrial and V One
Can any of the company-specific risk be diversified away by investing in both Songwon Industrial and V One 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 V One 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 V One Tech Co, you can compare the effects of market volatilities on Songwon Industrial and V One 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 V One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Songwon Industrial and V One.
Diversification Opportunities for Songwon Industrial and V One
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Songwon and 251630 is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Songwon Industrial Co and V One Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V One Tech 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 V One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V One Tech has no effect on the direction of Songwon Industrial i.e., Songwon Industrial and V One go up and down completely randomly.
Pair Corralation between Songwon Industrial and V One
Assuming the 90 days trading horizon Songwon Industrial is expected to generate 2.16 times less return on investment than V One. In addition to that, Songwon Industrial is 1.05 times more volatile than V One Tech Co. It trades about 0.09 of its total potential returns per unit of risk. V One Tech Co is currently generating about 0.19 per unit of volatility. If you would invest 465,000 in V One Tech Co on November 8, 2024 and sell it today you would earn a total of 46,000 from holding V One Tech Co or generate 9.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Songwon Industrial Co vs. V One Tech Co
Performance |
| Timeline |
| Songwon Industrial |
| V One Tech |
Songwon Industrial and V One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Songwon Industrial and V One
The main advantage of trading using opposite Songwon Industrial and V One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Songwon Industrial position performs unexpectedly, V One 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 V One will offset losses from the drop in V One's long position.| Songwon Industrial vs. Korea Industrial Co | Songwon Industrial vs. Narae Nanotech Corp | Songwon Industrial vs. Kbi Metal Co | Songwon Industrial vs. Hyundai Industrial 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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