Correlation Between SCI Information and Handok Clean
Can any of the company-specific risk be diversified away by investing in both SCI Information and Handok Clean 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 Handok Clean 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 Handok Clean Tech, you can compare the effects of market volatilities on SCI Information and Handok Clean 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 Handok Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCI Information and Handok Clean.
Diversification Opportunities for SCI Information and Handok Clean
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SCI and Handok is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding SCI Information Service and Handok Clean Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Handok Clean Tech 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 Handok Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Handok Clean Tech has no effect on the direction of SCI Information i.e., SCI Information and Handok Clean go up and down completely randomly.
Pair Corralation between SCI Information and Handok Clean
Assuming the 90 days trading horizon SCI Information Service is expected to under-perform the Handok Clean. In addition to that, SCI Information is 3.0 times more volatile than Handok Clean Tech. It trades about -0.21 of its total potential returns per unit of risk. Handok Clean Tech is currently generating about -0.37 per unit of volatility. If you would invest 673,000 in Handok Clean Tech on September 2, 2024 and sell it today you would lose (38,000) from holding Handok Clean Tech or give up 5.65% 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. Handok Clean Tech
Performance |
| Timeline |
| SCI Information Service |
| Handok Clean Tech |
SCI Information and Handok Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCI Information and Handok Clean
The main advantage of trading using opposite SCI Information and Handok Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCI Information position performs unexpectedly, Handok Clean 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 Handok Clean will offset losses from the drop in Handok Clean'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 |
| Handok Clean vs. Busan Industrial Co | Handok Clean vs. Busan Ind | Handok Clean vs. Mirae Asset Daewoo | Handok Clean vs. Finebesteel |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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