Correlation Between Silla Sg and HANA Micron
Can any of the company-specific risk be diversified away by investing in both Silla Sg and HANA Micron 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 Silla Sg and HANA Micron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silla Sg Co and HANA Micron, you can compare the effects of market volatilities on Silla Sg and HANA Micron 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 Silla Sg with a short position of HANA Micron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silla Sg and HANA Micron.
Diversification Opportunities for Silla Sg and HANA Micron
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Silla and HANA is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Silla Sg Co and HANA Micron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANA Micron and Silla Sg 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 Silla Sg Co are associated (or correlated) with HANA Micron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANA Micron has no effect on the direction of Silla Sg i.e., Silla Sg and HANA Micron go up and down completely randomly.
Pair Corralation between Silla Sg and HANA Micron
Assuming the 90 days trading horizon Silla Sg Co is expected to under-perform the HANA Micron. But the stock apears to be less risky and, when comparing its historical volatility, Silla Sg Co is 1.8 times less risky than HANA Micron. The stock trades about -0.03 of its potential returns per unit of risk. The HANA Micron is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 977,635 in HANA Micron on September 1, 2024 and sell it today you would lose (14,635) from holding HANA Micron or give up 1.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.77% |
| Values | Daily Returns |
Silla Sg Co vs. HANA Micron
Performance |
| Timeline |
| Silla Sg |
| HANA Micron |
Silla Sg and HANA Micron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silla Sg and HANA Micron
The main advantage of trading using opposite Silla Sg and HANA Micron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silla Sg position performs unexpectedly, HANA Micron 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 HANA Micron will offset losses from the drop in HANA Micron's long position.| Silla Sg vs. Korea Real Estate | Silla Sg vs. Korea Ratings Co | Silla Sg vs. IQuest Co | Silla Sg vs. Wonbang Tech Co |
| HANA Micron vs. Shinil Electronics Co | HANA Micron vs. Miwon Chemical | HANA Micron vs. DAEDUCK ELECTRONICS CoLtd | HANA Micron vs. TK Chemical |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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