Correlation Between SCI Information and Korea Information
Can any of the company-specific risk be diversified away by investing in both SCI Information and Korea Information 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 Korea Information 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 Korea Information Communications, you can compare the effects of market volatilities on SCI Information and Korea Information 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 Korea Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCI Information and Korea Information.
Diversification Opportunities for SCI Information and Korea Information
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SCI and Korea is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding SCI Information Service and Korea Information Communicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information 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 Korea Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of SCI Information i.e., SCI Information and Korea Information go up and down completely randomly.
Pair Corralation between SCI Information and Korea Information
Assuming the 90 days trading horizon SCI Information Service is expected to under-perform the Korea Information. In addition to that, SCI Information is 1.8 times more volatile than Korea Information Communications. It trades about -0.21 of its total potential returns per unit of risk. Korea Information Communications is currently generating about -0.13 per unit of volatility. If you would invest 865,000 in Korea Information Communications on September 3, 2024 and sell it today you would lose (53,000) from holding Korea Information Communications or give up 6.13% 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. Korea Information Communicatio
Performance |
| Timeline |
| SCI Information Service |
| Korea Information |
SCI Information and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCI Information and Korea Information
The main advantage of trading using opposite SCI Information and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCI Information position performs unexpectedly, Korea Information 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 Korea Information will offset losses from the drop in Korea Information's long position.| SCI Information vs. Lotte Data Communication | SCI Information vs. Sam Yang Foods | SCI Information vs. Display Tech Co | SCI Information vs. INNOX Advanced Materials |
| Korea Information vs. Cloud Air CoLtd | Korea Information vs. Genie Music | Korea Information vs. Samlip General Foods | Korea Information vs. Organic Special Pet |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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