Correlation Between Hotel Shilla and Sangsin Energy
Can any of the company-specific risk be diversified away by investing in both Hotel Shilla and Sangsin Energy 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 Hotel Shilla and Sangsin Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hotel Shilla Co and Sangsin Energy Display, you can compare the effects of market volatilities on Hotel Shilla and Sangsin Energy 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 Hotel Shilla with a short position of Sangsin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Shilla and Sangsin Energy.
Diversification Opportunities for Hotel Shilla and Sangsin Energy
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hotel and Sangsin is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Shilla Co and Sangsin Energy Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsin Energy Display and Hotel Shilla 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 Hotel Shilla Co are associated (or correlated) with Sangsin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsin Energy Display has no effect on the direction of Hotel Shilla i.e., Hotel Shilla and Sangsin Energy go up and down completely randomly.
Pair Corralation between Hotel Shilla and Sangsin Energy
Assuming the 90 days trading horizon Hotel Shilla Co is expected to under-perform the Sangsin Energy. But the stock apears to be less risky and, when comparing its historical volatility, Hotel Shilla Co is 3.47 times less risky than Sangsin Energy. The stock trades about -0.11 of its potential returns per unit of risk. The Sangsin Energy Display is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 776,376 in Sangsin Energy Display on October 17, 2024 and sell it today you would earn a total of 14,624 from holding Sangsin Energy Display or generate 1.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hotel Shilla Co vs. Sangsin Energy Display
Performance |
| Timeline |
| Hotel Shilla |
| Sangsin Energy Display |
Hotel Shilla and Sangsin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Shilla and Sangsin Energy
The main advantage of trading using opposite Hotel Shilla and Sangsin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Shilla position performs unexpectedly, Sangsin Energy 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 Sangsin Energy will offset losses from the drop in Sangsin Energy's long position.| Hotel Shilla vs. Hanwha Chemical Corp | Hotel Shilla vs. Organic Special Pet | Hotel Shilla vs. KPX Green Chemical | Hotel Shilla vs. CJ Seafood Corp |
| Sangsin Energy vs. Daejung Chemicals Metals | Sangsin Energy vs. Hyundai Industrial Co | Sangsin Energy vs. Hotel Shilla Co | Sangsin Energy vs. Myoung Shin Industrial |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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