Correlation Between SOOSAN INT and VAIV
Can any of the company-specific risk be diversified away by investing in both SOOSAN INT and VAIV 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 VAIV 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 VAIV Co, you can compare the effects of market volatilities on SOOSAN INT and VAIV 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 VAIV. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOOSAN INT and VAIV.
Diversification Opportunities for SOOSAN INT and VAIV
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SOOSAN and VAIV is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding SOOSAN INT Co and VAIV Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VAIV 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 VAIV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VAIV has no effect on the direction of SOOSAN INT i.e., SOOSAN INT and VAIV go up and down completely randomly.
Pair Corralation between SOOSAN INT and VAIV
Assuming the 90 days trading horizon SOOSAN INT Co is expected to generate 1.07 times more return on investment than VAIV. However, SOOSAN INT is 1.07 times more volatile than VAIV Co. It trades about 0.04 of its potential returns per unit of risk. VAIV Co is currently generating about -0.02 per unit of risk. If you would invest 1,016,312 in SOOSAN INT Co on January 24, 2025 and sell it today you would earn a total of 520,688 from holding SOOSAN INT Co or generate 51.23% 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. VAIV Co
Performance |
| Timeline |
| SOOSAN INT |
| VAIV |
SOOSAN INT and VAIV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOOSAN INT and VAIV
The main advantage of trading using opposite SOOSAN INT and VAIV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOOSAN INT position performs unexpectedly, VAIV 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 VAIV will offset losses from the drop in VAIV's long position.| SOOSAN INT vs. Seoul Food Industrial | SOOSAN INT vs. Samhwa Paint Industrial | SOOSAN INT vs. Hanwha Life Insurance | SOOSAN INT vs. Shinhan Inverse Silver |
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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