Correlation Between Ecoplastic and Samwha Electronics
Can any of the company-specific risk be diversified away by investing in both Ecoplastic and Samwha Electronics 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 Ecoplastic and Samwha Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecoplastic and Samwha Electronics Co, you can compare the effects of market volatilities on Ecoplastic and Samwha Electronics 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 Ecoplastic with a short position of Samwha Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecoplastic and Samwha Electronics.
Diversification Opportunities for Ecoplastic and Samwha Electronics
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ecoplastic and Samwha is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Ecoplastic and Samwha Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samwha Electronics and Ecoplastic 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 Ecoplastic are associated (or correlated) with Samwha Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samwha Electronics has no effect on the direction of Ecoplastic i.e., Ecoplastic and Samwha Electronics go up and down completely randomly.
Pair Corralation between Ecoplastic and Samwha Electronics
Assuming the 90 days trading horizon Ecoplastic is expected to under-perform the Samwha Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Ecoplastic is 3.31 times less risky than Samwha Electronics. The stock trades about -0.23 of its potential returns per unit of risk. The Samwha Electronics Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 294,000 in Samwha Electronics Co on August 29, 2024 and sell it today you would earn a total of 18,000 from holding Samwha Electronics Co or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecoplastic vs. Samwha Electronics Co
Performance |
| Timeline |
| Ecoplastic |
| Samwha Electronics |
Ecoplastic and Samwha Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecoplastic and Samwha Electronics
The main advantage of trading using opposite Ecoplastic and Samwha Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecoplastic position performs unexpectedly, Samwha Electronics 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 Samwha Electronics will offset losses from the drop in Samwha Electronics' long position.| Ecoplastic vs. Busan Industrial Co | Ecoplastic vs. Busan Ind | Ecoplastic vs. Mirae Asset Daewoo | Ecoplastic vs. UNISEM Co |
| Samwha Electronics vs. Organic Special Pet | Samwha Electronics vs. Hyundai Green Food | Samwha Electronics vs. Tamul Multimedia Co | Samwha Electronics vs. SM Entertainment 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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