Correlation Between Korea Computer and Sangsangin Investment
Can any of the company-specific risk be diversified away by investing in both Korea Computer and Sangsangin Investment 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 Korea Computer and Sangsangin Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Computer and Sangsangin Investment Securities, you can compare the effects of market volatilities on Korea Computer and Sangsangin Investment 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 Korea Computer with a short position of Sangsangin Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Computer and Sangsangin Investment.
Diversification Opportunities for Korea Computer and Sangsangin Investment
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korea and Sangsangin is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Korea Computer and Sangsangin Investment Securiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsangin Investment and Korea Computer 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 Korea Computer are associated (or correlated) with Sangsangin Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsangin Investment has no effect on the direction of Korea Computer i.e., Korea Computer and Sangsangin Investment go up and down completely randomly.
Pair Corralation between Korea Computer and Sangsangin Investment
Assuming the 90 days trading horizon Korea Computer is expected to under-perform the Sangsangin Investment. In addition to that, Korea Computer is 2.45 times more volatile than Sangsangin Investment Securities. It trades about -0.07 of its total potential returns per unit of risk. Sangsangin Investment Securities is currently generating about -0.07 per unit of volatility. If you would invest 44,600 in Sangsangin Investment Securities on September 1, 2024 and sell it today you would lose (1,000.00) from holding Sangsangin Investment Securities or give up 2.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Computer vs. Sangsangin Investment Securiti
Performance |
| Timeline |
| Korea Computer |
| Sangsangin Investment |
Korea Computer and Sangsangin Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Computer and Sangsangin Investment
The main advantage of trading using opposite Korea Computer and Sangsangin Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Computer position performs unexpectedly, Sangsangin Investment 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 Sangsangin Investment will offset losses from the drop in Sangsangin Investment's long position.| Korea Computer vs. Dongsin Engineering Construction | Korea Computer vs. Doosan Fuel Cell | Korea Computer vs. Daishin Balance 1 | Korea Computer vs. Total Soft Bank |
| Sangsangin Investment vs. Samsung Electronics Co | Sangsangin Investment vs. Samsung Electronics Co | Sangsangin Investment vs. KB Financial Group | Sangsangin Investment vs. Shinhan Financial Group |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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