Correlation Between SOOSAN INT and Sang A
Can any of the company-specific risk be diversified away by investing in both SOOSAN INT 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 SOOSAN INT and Sang A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOOSAN INT Co and Sang A Frontec CoLtd, you can compare the effects of market volatilities on SOOSAN INT 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 SOOSAN INT with a short position of Sang A. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOOSAN INT and Sang A.
Diversification Opportunities for SOOSAN INT and Sang A
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SOOSAN and Sang is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding SOOSAN INT Co 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 SOOSAN INT 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 SOOSAN INT Co 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 SOOSAN INT i.e., SOOSAN INT and Sang A go up and down completely randomly.
Pair Corralation between SOOSAN INT and Sang A
Assuming the 90 days trading horizon SOOSAN INT Co is expected to generate 3.19 times more return on investment than Sang A. However, SOOSAN INT is 3.19 times more volatile than Sang A Frontec CoLtd. It trades about 0.11 of its potential returns per unit of risk. Sang A Frontec CoLtd is currently generating about -0.15 per unit of risk. If you would invest 983,080 in SOOSAN INT Co on November 6, 2024 and sell it today you would earn a total of 416,920 from holding SOOSAN INT Co or generate 42.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOOSAN INT Co vs. Sang A Frontec CoLtd
Performance |
| Timeline |
| SOOSAN INT |
| Sang A Frontec |
SOOSAN INT and Sang A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOOSAN INT and Sang A
The main advantage of trading using opposite SOOSAN INT and Sang A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOOSAN INT 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.| SOOSAN INT vs. Shinhan Inverse Silver | SOOSAN INT vs. Korean Reinsurance Co | SOOSAN INT vs. Lotte Chilsung Beverage | SOOSAN INT vs. Settlebank |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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