Correlation Between Korea New and SGC ETEC
Can any of the company-specific risk be diversified away by investing in both Korea New and SGC ETEC 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 New and SGC ETEC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea New Network and SGC eTEC EC, you can compare the effects of market volatilities on Korea New and SGC ETEC 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 New with a short position of SGC ETEC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea New and SGC ETEC.
Diversification Opportunities for Korea New and SGC ETEC
Very good diversification
The 3 months correlation between Korea and SGC is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Korea New Network and SGC eTEC EC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGC eTEC EC and Korea New 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 New Network are associated (or correlated) with SGC ETEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGC eTEC EC has no effect on the direction of Korea New i.e., Korea New and SGC ETEC go up and down completely randomly.
Pair Corralation between Korea New and SGC ETEC
Assuming the 90 days trading horizon Korea New Network is expected to generate 0.96 times more return on investment than SGC ETEC. However, Korea New Network is 1.04 times less risky than SGC ETEC. It trades about -0.04 of its potential returns per unit of risk. SGC eTEC EC is currently generating about -0.09 per unit of risk. If you would invest 105,696 in Korea New Network on September 12, 2024 and sell it today you would lose (19,696) from holding Korea New Network or give up 18.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.58% |
| Values | Daily Returns |
Korea New Network vs. SGC eTEC EC
Performance |
| Timeline |
| Korea New Network |
| SGC eTEC EC |
Korea New and SGC ETEC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea New and SGC ETEC
The main advantage of trading using opposite Korea New and SGC ETEC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea New position performs unexpectedly, SGC ETEC 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 SGC ETEC will offset losses from the drop in SGC ETEC's long position.| Korea New vs. BGF Retail Co | Korea New vs. LG Display Co | Korea New vs. Grand Korea Leisure | Korea New vs. Lake Materials Co |
| SGC ETEC vs. Korea New Network | SGC ETEC vs. Solution Advanced Technology | SGC ETEC vs. Busan Industrial Co | SGC ETEC vs. Busan Ind |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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