Correlation Between Display Tech and Sangsin Energy
Can any of the company-specific risk be diversified away by investing in both Display Tech and Sangsin Energy 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 Display Tech and Sangsin Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Display Tech Co and Sangsin Energy Display, you can compare the effects of market volatilities on Display Tech and Sangsin Energy 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 Display Tech with a short position of Sangsin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Display Tech and Sangsin Energy.
Diversification Opportunities for Display Tech and Sangsin Energy
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Display and Sangsin is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Display Tech Co and Sangsin Energy Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsin Energy Display and Display Tech 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 Display Tech Co are associated (or correlated) with Sangsin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsin Energy Display has no effect on the direction of Display Tech i.e., Display Tech and Sangsin Energy go up and down completely randomly.
Pair Corralation between Display Tech and Sangsin Energy
Assuming the 90 days trading horizon Display Tech Co is expected to generate 0.5 times more return on investment than Sangsin Energy. However, Display Tech Co is 1.99 times less risky than Sangsin Energy. It trades about -0.35 of its potential returns per unit of risk. Sangsin Energy Display is currently generating about -0.42 per unit of risk. If you would invest 330,000 in Display Tech Co on August 25, 2024 and sell it today you would lose (30,500) from holding Display Tech Co or give up 9.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Display Tech Co vs. Sangsin Energy Display
Performance |
| Timeline |
| Display Tech |
| Sangsin Energy Display |
Display Tech and Sangsin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Display Tech and Sangsin Energy
The main advantage of trading using opposite Display Tech and Sangsin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Display Tech position performs unexpectedly, Sangsin Energy 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 Sangsin Energy will offset losses from the drop in Sangsin Energy's long position.| Display Tech vs. AptaBio Therapeutics | Display Tech vs. Daewoo SBI SPAC | Display Tech vs. Dream Security co | Display Tech vs. Microfriend |
| Sangsin Energy vs. Samsung Electronics Co | Sangsin Energy vs. Samsung Electronics Co | Sangsin Energy vs. Hyundai Motor Co | Sangsin Energy vs. Hyundai Motor |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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