Correlation Between SFA Semicon and SS TECH
Can any of the company-specific risk be diversified away by investing in both SFA Semicon and SS TECH 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 SFA Semicon and SS TECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SFA Semicon Co and SS TECH, you can compare the effects of market volatilities on SFA Semicon and SS TECH 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 SFA Semicon with a short position of SS TECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFA Semicon and SS TECH.
Diversification Opportunities for SFA Semicon and SS TECH
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SFA and 101490 is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding SFA Semicon Co and SS TECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SS TECH and SFA Semicon 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 SFA Semicon Co are associated (or correlated) with SS TECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SS TECH has no effect on the direction of SFA Semicon i.e., SFA Semicon and SS TECH go up and down completely randomly.
Pair Corralation between SFA Semicon and SS TECH
Assuming the 90 days trading horizon SFA Semicon Co is expected to generate 0.91 times more return on investment than SS TECH. However, SFA Semicon Co is 1.1 times less risky than SS TECH. It trades about -0.03 of its potential returns per unit of risk. SS TECH is currently generating about -0.04 per unit of risk. If you would invest 520,000 in SFA Semicon Co on August 26, 2024 and sell it today you would lose (198,000) from holding SFA Semicon Co or give up 38.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SFA Semicon Co vs. SS TECH
Performance |
| Timeline |
| SFA Semicon |
| SS TECH |
SFA Semicon and SS TECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SFA Semicon and SS TECH
The main advantage of trading using opposite SFA Semicon and SS TECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFA Semicon position performs unexpectedly, SS TECH 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 SS TECH will offset losses from the drop in SS TECH's long position.| SFA Semicon vs. Korea Real Estate | SFA Semicon vs. Korea Ratings Co | SFA Semicon vs. IQuest Co | SFA Semicon vs. Wonbang Tech Co |
| SS TECH vs. Korea Real Estate | SS TECH vs. Korea Ratings Co | SS TECH vs. IQuest Co | SS TECH vs. Wonbang Tech 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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