Correlation Between SCI Information and Chin Yang
Can any of the company-specific risk be diversified away by investing in both SCI Information and Chin Yang 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 Chin Yang 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 Chin Yang Chemical, you can compare the effects of market volatilities on SCI Information and Chin Yang 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 Chin Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCI Information and Chin Yang.
Diversification Opportunities for SCI Information and Chin Yang
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SCI and Chin is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding SCI Information Service and Chin Yang Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chin Yang Chemical 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 Chin Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chin Yang Chemical has no effect on the direction of SCI Information i.e., SCI Information and Chin Yang go up and down completely randomly.
Pair Corralation between SCI Information and Chin Yang
Assuming the 90 days trading horizon SCI Information Service is expected to under-perform the Chin Yang. In addition to that, SCI Information is 1.26 times more volatile than Chin Yang Chemical. It trades about -0.08 of its total potential returns per unit of risk. Chin Yang Chemical is currently generating about -0.04 per unit of volatility. If you would invest 279,752 in Chin Yang Chemical on September 2, 2024 and sell it today you would lose (58,252) from holding Chin Yang Chemical or give up 20.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCI Information Service vs. Chin Yang Chemical
Performance |
| Timeline |
| SCI Information Service |
| Chin Yang Chemical |
SCI Information and Chin Yang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCI Information and Chin Yang
The main advantage of trading using opposite SCI Information and Chin Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCI Information position performs unexpectedly, Chin Yang 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 Chin Yang will offset losses from the drop in Chin Yang's long position.| SCI Information vs. Samsung Electronics Co | SCI Information vs. Samsung Electronics Co | SCI Information vs. KB Financial Group | SCI Information vs. Shinhan Financial Group |
| Chin Yang vs. AptaBio Therapeutics | Chin Yang vs. Daewoo SBI SPAC | Chin Yang vs. Dream Security co | Chin Yang vs. Microfriend |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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