Correlation Between ABCO Electronics and Samji Electronics
Can any of the company-specific risk be diversified away by investing in both ABCO Electronics and Samji Electronics 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 ABCO Electronics and Samji Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABCO Electronics Co and Samji Electronics Co, you can compare the effects of market volatilities on ABCO Electronics and Samji Electronics 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 ABCO Electronics with a short position of Samji Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABCO Electronics and Samji Electronics.
Diversification Opportunities for ABCO Electronics and Samji Electronics
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ABCO and Samji is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding ABCO Electronics Co and Samji Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samji Electronics and ABCO 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 ABCO Electronics Co are associated (or correlated) with Samji Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samji Electronics has no effect on the direction of ABCO Electronics i.e., ABCO Electronics and Samji Electronics go up and down completely randomly.
Pair Corralation between ABCO Electronics and Samji Electronics
Assuming the 90 days trading horizon ABCO Electronics Co is expected to under-perform the Samji Electronics. In addition to that, ABCO Electronics is 3.49 times more volatile than Samji Electronics Co. It trades about -0.12 of its total potential returns per unit of risk. Samji Electronics Co is currently generating about -0.05 per unit of volatility. If you would invest 860,000 in Samji Electronics Co on August 29, 2024 and sell it today you would lose (8,000) from holding Samji Electronics Co or give up 0.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABCO Electronics Co vs. Samji Electronics Co
Performance |
| Timeline |
| ABCO Electronics |
| Samji Electronics |
ABCO Electronics and Samji Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABCO Electronics and Samji Electronics
The main advantage of trading using opposite ABCO Electronics and Samji Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABCO Electronics position performs unexpectedly, Samji Electronics 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 Samji Electronics will offset losses from the drop in Samji Electronics' long position.| ABCO Electronics vs. Korea Real Estate | ABCO Electronics vs. Korea Ratings Co | ABCO Electronics vs. IQuest Co | ABCO Electronics vs. Wonbang Tech Co |
| Samji Electronics vs. SFA Semicon Co | Samji Electronics vs. Seronics Co | Samji Electronics vs. COWELL FASHION CoLtd | Samji Electronics vs. Seohee Construction Co |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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