Correlation Between SCI Information and PLAYWITH
Can any of the company-specific risk be diversified away by investing in both SCI Information and PLAYWITH 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 SCI Information and PLAYWITH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCI Information Service and PLAYWITH, you can compare the effects of market volatilities on SCI Information and PLAYWITH 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 SCI Information with a short position of PLAYWITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCI Information and PLAYWITH.
Diversification Opportunities for SCI Information and PLAYWITH
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SCI and PLAYWITH is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding SCI Information Service and PLAYWITH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYWITH and SCI 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 SCI Information Service are associated (or correlated) with PLAYWITH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYWITH has no effect on the direction of SCI Information i.e., SCI Information and PLAYWITH go up and down completely randomly.
Pair Corralation between SCI Information and PLAYWITH
Assuming the 90 days trading horizon SCI Information Service is expected to generate 0.76 times more return on investment than PLAYWITH. However, SCI Information Service is 1.32 times less risky than PLAYWITH. It trades about -0.02 of its potential returns per unit of risk. PLAYWITH is currently generating about -0.02 per unit of risk. If you would invest 364,368 in SCI Information Service on October 14, 2024 and sell it today you would lose (128,368) from holding SCI Information Service or give up 35.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCI Information Service vs. PLAYWITH
Performance |
| Timeline |
| SCI Information Service |
| PLAYWITH |
SCI Information and PLAYWITH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCI Information and PLAYWITH
The main advantage of trading using opposite SCI Information and PLAYWITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCI Information position performs unexpectedly, PLAYWITH 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 PLAYWITH will offset losses from the drop in PLAYWITH's long position.| SCI Information vs. Hyundai Engineering Plastics | SCI Information vs. Taegu Broadcasting | SCI Information vs. Kolon Plastics | SCI Information vs. Hana Materials |
| PLAYWITH vs. Handok Clean Tech | PLAYWITH vs. DB Financial Investment | PLAYWITH vs. Woori Financial Group | PLAYWITH vs. SCI Information Service |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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