Correlation Between SOOSAN INT and SGA Solutions
Can any of the company-specific risk be diversified away by investing in both SOOSAN INT and SGA Solutions 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 SGA Solutions 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 SGA Solutions CoLtd, you can compare the effects of market volatilities on SOOSAN INT and SGA Solutions 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 SGA Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOOSAN INT and SGA Solutions.
Diversification Opportunities for SOOSAN INT and SGA Solutions
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SOOSAN and SGA is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding SOOSAN INT Co and SGA Solutions CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGA Solutions CoLtd 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 SGA Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGA Solutions CoLtd has no effect on the direction of SOOSAN INT i.e., SOOSAN INT and SGA Solutions go up and down completely randomly.
Pair Corralation between SOOSAN INT and SGA Solutions
Assuming the 90 days trading horizon SOOSAN INT Co is expected to under-perform the SGA Solutions. In addition to that, SOOSAN INT is 1.4 times more volatile than SGA Solutions CoLtd. It trades about -0.21 of its total potential returns per unit of risk. SGA Solutions CoLtd is currently generating about 0.08 per unit of volatility. If you would invest 47,900 in SGA Solutions CoLtd on November 7, 2024 and sell it today you would earn a total of 1,300 from holding SGA Solutions CoLtd or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOOSAN INT Co vs. SGA Solutions CoLtd
Performance |
| Timeline |
| SOOSAN INT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| SGA Solutions CoLtd |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
SOOSAN INT and SGA Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOOSAN INT and SGA Solutions
The main advantage of trading using opposite SOOSAN INT and SGA Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOOSAN INT position performs unexpectedly, SGA Solutions 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 SGA Solutions will offset losses from the drop in SGA Solutions' long position.| SOOSAN INT vs. Ssangyong Materials Corp | SOOSAN INT vs. Nasmedia Co | SOOSAN INT vs. Kaonmedia Co | SOOSAN INT vs. Seoul Electronics Telecom |
| SGA Solutions vs. Samsung Electronics Co | SGA Solutions vs. Samsung Electronics Co | SGA Solutions vs. Hyundai Motor Co | SGA Solutions vs. LG Electronics |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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