Correlation Between Seoul Electronics and Sangsin Energy
Can any of the company-specific risk be diversified away by investing in both Seoul Electronics 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 Seoul Electronics and Sangsin Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seoul Electronics Telecom and Sangsin Energy Display, you can compare the effects of market volatilities on Seoul Electronics 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 Seoul Electronics with a short position of Sangsin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Electronics and Sangsin Energy.
Diversification Opportunities for Seoul Electronics and Sangsin Energy
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Seoul and Sangsin is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Electronics Telecom 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 Seoul Electronics 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 Seoul Electronics Telecom 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 Seoul Electronics i.e., Seoul Electronics and Sangsin Energy go up and down completely randomly.
Pair Corralation between Seoul Electronics and Sangsin Energy
Assuming the 90 days trading horizon Seoul Electronics Telecom is expected to under-perform the Sangsin Energy. But the stock apears to be less risky and, when comparing its historical volatility, Seoul Electronics Telecom is 1.17 times less risky than Sangsin Energy. The stock trades about -0.05 of its potential returns per unit of risk. The Sangsin Energy Display is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,606,051 in Sangsin Energy Display on October 14, 2024 and sell it today you would lose (818,051) from holding Sangsin Energy Display or give up 50.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoul Electronics Telecom vs. Sangsin Energy Display
Performance |
| Timeline |
| Seoul Electronics Telecom |
| Sangsin Energy Display |
Seoul Electronics and Sangsin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Electronics and Sangsin Energy
The main advantage of trading using opposite Seoul Electronics and Sangsin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Electronics 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.| Seoul Electronics vs. Kbi Metal Co | Seoul Electronics vs. Shinil Electronics Co | Seoul Electronics vs. Daeduck Electronics Co | Seoul Electronics vs. Korea Electronic Certification |
| Sangsin Energy vs. Korea Alcohol Industrial | Sangsin Energy vs. Shinil Electronics Co | Sangsin Energy vs. Daewoo Electronic Components | Sangsin Energy vs. Seoul Electronics Telecom |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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