Correlation Between Total Soft and Sang A
Can any of the company-specific risk be diversified away by investing in both Total Soft and Sang A 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 Total Soft and Sang A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Total Soft Bank and Sang A Frontec CoLtd, you can compare the effects of market volatilities on Total Soft and Sang A 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 Total Soft with a short position of Sang A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Total Soft and Sang A.
Diversification Opportunities for Total Soft and Sang A
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Total and Sang is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Total Soft Bank and Sang A Frontec CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sang A Frontec and Total Soft 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 Total Soft Bank are associated (or correlated) with Sang A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sang A Frontec has no effect on the direction of Total Soft i.e., Total Soft and Sang A go up and down completely randomly.
Pair Corralation between Total Soft and Sang A
Assuming the 90 days trading horizon Total Soft Bank is expected to under-perform the Sang A. In addition to that, Total Soft is 1.22 times more volatile than Sang A Frontec CoLtd. It trades about -0.63 of its total potential returns per unit of risk. Sang A Frontec CoLtd is currently generating about -0.6 per unit of volatility. If you would invest 1,938,000 in Sang A Frontec CoLtd on November 6, 2024 and sell it today you would lose (393,000) from holding Sang A Frontec CoLtd or give up 20.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Total Soft Bank vs. Sang A Frontec CoLtd
Performance |
| Timeline |
| Total Soft Bank |
| Sang A Frontec |
Total Soft and Sang A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Total Soft and Sang A
The main advantage of trading using opposite Total Soft and Sang A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Total Soft position performs unexpectedly, Sang A 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 Sang A will offset losses from the drop in Sang A's long position.| Total Soft vs. Dongwoon Anatech Co | Total Soft vs. Narae Nanotech Corp | Total Soft vs. ADTechnology CoLtd | Total Soft vs. DONGKUK TED METAL |
| Sang A vs. CKH Food Health | Sang A vs. Samlip General Foods | Sang A vs. Seoul Semiconductor Co | Sang A vs. Dong A Steel Technology |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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