Correlation Between Songwon Industrial and IL Science
Can any of the company-specific risk be diversified away by investing in both Songwon Industrial and IL Science 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 IL Science 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 IL Science Co, you can compare the effects of market volatilities on Songwon Industrial and IL Science 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 IL Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Songwon Industrial and IL Science.
Diversification Opportunities for Songwon Industrial and IL Science
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Songwon and 307180 is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Songwon Industrial Co and IL Science Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IL Science 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 IL Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IL Science has no effect on the direction of Songwon Industrial i.e., Songwon Industrial and IL Science go up and down completely randomly.
Pair Corralation between Songwon Industrial and IL Science
Assuming the 90 days trading horizon Songwon Industrial Co is expected to under-perform the IL Science. In addition to that, Songwon Industrial is 1.04 times more volatile than IL Science Co. It trades about -0.39 of its total potential returns per unit of risk. IL Science Co is currently generating about -0.18 per unit of volatility. If you would invest 312,500 in IL Science Co on September 1, 2024 and sell it today you would lose (37,000) from holding IL Science Co or give up 11.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Songwon Industrial Co vs. IL Science Co
Performance |
| Timeline |
| Songwon Industrial |
| IL Science |
Songwon Industrial and IL Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Songwon Industrial and IL Science
The main advantage of trading using opposite Songwon Industrial and IL Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Songwon Industrial position performs unexpectedly, IL Science 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 IL Science will offset losses from the drop in IL Science's long position.| Songwon Industrial vs. AptaBio Therapeutics | Songwon Industrial vs. Daewoo SBI SPAC | Songwon Industrial vs. Dream Security co | Songwon Industrial vs. Microfriend |
| IL Science vs. Samyang Foods Co | IL Science vs. Foodnamoo | IL Science vs. Nice Information Telecommunication | IL Science vs. Samlip General Foods |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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