Correlation Between Insung Information and Samhyun Steel
Can any of the company-specific risk be diversified away by investing in both Insung Information and Samhyun Steel 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 Insung Information and Samhyun Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insung Information Co and Samhyun Steel Co, you can compare the effects of market volatilities on Insung Information and Samhyun Steel 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 Insung Information with a short position of Samhyun Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insung Information and Samhyun Steel.
Diversification Opportunities for Insung Information and Samhyun Steel
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Insung and Samhyun is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Insung Information Co and Samhyun Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhyun Steel and Insung Information 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 Insung Information Co are associated (or correlated) with Samhyun Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhyun Steel has no effect on the direction of Insung Information i.e., Insung Information and Samhyun Steel go up and down completely randomly.
Pair Corralation between Insung Information and Samhyun Steel
Assuming the 90 days trading horizon Insung Information Co is expected to under-perform the Samhyun Steel. In addition to that, Insung Information is 4.51 times more volatile than Samhyun Steel Co. It trades about -0.01 of its total potential returns per unit of risk. Samhyun Steel Co is currently generating about 0.0 per unit of volatility. If you would invest 475,472 in Samhyun Steel Co on September 14, 2024 and sell it today you would lose (4,972) from holding Samhyun Steel Co or give up 1.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insung Information Co vs. Samhyun Steel Co
Performance |
| Timeline |
| Insung Information |
| Samhyun Steel |
Insung Information and Samhyun Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insung Information and Samhyun Steel
The main advantage of trading using opposite Insung Information and Samhyun Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insung Information position performs unexpectedly, Samhyun Steel 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 Samhyun Steel will offset losses from the drop in Samhyun Steel's long position.| Insung Information vs. Phoenix Materials Co | Insung Information vs. WONIK Materials CoLtd | Insung Information vs. Shinhan Inverse Copper | Insung Information vs. MetaLabs Co |
| Samhyun Steel vs. Keum Kang Steel | Samhyun Steel vs. Gyeongnam Steel Co | Samhyun Steel vs. Jeil Steel Mfg | Samhyun Steel vs. Wonil Special Steel |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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