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 Engineering, 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
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SCI and Korea is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding SCI Information Service and Korea Information Engineering 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. But the stock apears to be less risky and, when comparing its historical volatility, SCI Information Service is 1.42 times less risky than Korea Information. The stock trades about -0.18 of its potential returns per unit of risk. The Korea Information Engineering is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 239,000 in Korea Information Engineering on October 28, 2024 and sell it today you would earn a total of 19,000 from holding Korea Information Engineering or generate 7.95% return on investment 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 Engineering
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. Korea Electronic Certification | SCI Information vs. Shinil Electronics Co | SCI Information vs. Sungmoon Electronics Co | SCI Information vs. Samji Electronics Co |
| Korea Information vs. INFINITT Healthcare Co | Korea Information vs. PJ Metal Co | Korea Information vs. Infinitt Healthcare Co | Korea Information vs. Echomarketing CoLtd |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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