Correlation Between SCI Information and Korea Electronic
Can any of the company-specific risk be diversified away by investing in both SCI Information and Korea Electronic 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 Electronic 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 Electronic Certification, you can compare the effects of market volatilities on SCI Information and Korea Electronic 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 Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCI Information and Korea Electronic.
Diversification Opportunities for SCI Information and Korea Electronic
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SCI and Korea is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding SCI Information Service and Korea Electronic Certification in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Electronic Cer 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 Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Electronic Cer has no effect on the direction of SCI Information i.e., SCI Information and Korea Electronic go up and down completely randomly.
Pair Corralation between SCI Information and Korea Electronic
Assuming the 90 days trading horizon SCI Information Service is expected to under-perform the Korea Electronic. But the stock apears to be less risky and, when comparing its historical volatility, SCI Information Service is 1.2 times less risky than Korea Electronic. The stock trades about -0.18 of its potential returns per unit of risk. The Korea Electronic Certification is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 298,500 in Korea Electronic Certification on November 2, 2024 and sell it today you would earn a total of 20,500 from holding Korea Electronic Certification or generate 6.87% 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 Electronic Certification
Performance |
| Timeline |
| SCI Information Service |
| Korea Electronic Cer |
SCI Information and Korea Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCI Information and Korea Electronic
The main advantage of trading using opposite SCI Information and Korea Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCI Information position performs unexpectedly, Korea Electronic 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 Electronic will offset losses from the drop in Korea Electronic's long position.| SCI Information vs. Jinro Distillers Co | SCI Information vs. A Tech Solution Co | SCI Information vs. CU Medical Systems | SCI Information vs. Infinitt Healthcare Co |
| Korea Electronic vs. FNSTech Co | Korea Electronic vs. PLAYWITH | Korea Electronic vs. Solution Advanced Technology | Korea Electronic vs. KMH Hitech 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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