Correlation Between SCI Information and Insung Information
Can any of the company-specific risk be diversified away by investing in both SCI Information and Insung 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 Insung 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 Insung Information Co, you can compare the effects of market volatilities on SCI Information and Insung 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 Insung Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCI Information and Insung Information.
Diversification Opportunities for SCI Information and Insung Information
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SCI and Insung is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding SCI Information Service and Insung Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insung 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 Insung Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insung Information has no effect on the direction of SCI Information i.e., SCI Information and Insung Information go up and down completely randomly.
Pair Corralation between SCI Information and Insung Information
Assuming the 90 days trading horizon SCI Information Service is expected to under-perform the Insung Information. But the stock apears to be less risky and, when comparing its historical volatility, SCI Information Service is 1.54 times less risky than Insung Information. The stock trades about -0.18 of its potential returns per unit of risk. The Insung Information Co is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 174,800 in Insung Information Co on October 28, 2024 and sell it today you would earn a total of 13,500 from holding Insung Information Co or generate 7.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCI Information Service vs. Insung Information Co
Performance |
| Timeline |
| SCI Information Service |
| Insung Information |
SCI Information and Insung Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCI Information and Insung Information
The main advantage of trading using opposite SCI Information and Insung Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCI Information position performs unexpectedly, Insung 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 Insung Information will offset losses from the drop in Insung Information's long position.| SCI Information vs. Korea Electronic Certification | SCI Information vs. Shinil Electronics Co | SCI Information vs. Sungmoon Electronics Co | SCI Information vs. Samji Electronics Co |
| Insung Information vs. Namhae Chemical | Insung Information vs. N2Tech Co | Insung Information vs. Wireless Power Amplifier | Insung Information vs. iNtRON Biotechnology |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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