Correlation Between Clean Science and Stic Investments
Can any of the company-specific risk be diversified away by investing in both Clean Science and Stic Investments 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 Clean Science and Stic Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clean Science co and Stic Investments, you can compare the effects of market volatilities on Clean Science and Stic Investments 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 Clean Science with a short position of Stic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Science and Stic Investments.
Diversification Opportunities for Clean Science and Stic Investments
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Clean and Stic is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Clean Science co and Stic Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stic Investments and Clean Science 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 Clean Science co are associated (or correlated) with Stic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stic Investments has no effect on the direction of Clean Science i.e., Clean Science and Stic Investments go up and down completely randomly.
Pair Corralation between Clean Science and Stic Investments
Assuming the 90 days trading horizon Clean Science co is expected to under-perform the Stic Investments. But the stock apears to be less risky and, when comparing its historical volatility, Clean Science co is 1.99 times less risky than Stic Investments. The stock trades about -0.54 of its potential returns per unit of risk. The Stic Investments is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 796,000 in Stic Investments on August 28, 2024 and sell it today you would lose (13,000) from holding Stic Investments or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clean Science co vs. Stic Investments
Performance |
| Timeline |
| Clean Science co |
| Stic Investments |
Clean Science and Stic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Science and Stic Investments
The main advantage of trading using opposite Clean Science and Stic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Science position performs unexpectedly, Stic Investments 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 Stic Investments will offset losses from the drop in Stic Investments' long position.| Clean Science vs. Korea Alcohol Industrial | Clean Science vs. Global Standard Technology | Clean Science vs. Puloon Technology | Clean Science vs. YG Entertainment |
| Stic Investments vs. Korea Real Estate | Stic Investments vs. Korea Ratings Co | Stic Investments vs. IQuest Co | Stic Investments 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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