Correlation Between Sangsin Energy and National Plastic
Can any of the company-specific risk be diversified away by investing in both Sangsin Energy and National Plastic 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 Sangsin Energy and National Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sangsin Energy Display and National Plastic Co, you can compare the effects of market volatilities on Sangsin Energy and National Plastic 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 Sangsin Energy with a short position of National Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangsin Energy and National Plastic.
Diversification Opportunities for Sangsin Energy and National Plastic
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sangsin and National is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sangsin Energy Display and National Plastic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Plastic and Sangsin Energy 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 Sangsin Energy Display are associated (or correlated) with National Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Plastic has no effect on the direction of Sangsin Energy i.e., Sangsin Energy and National Plastic go up and down completely randomly.
Pair Corralation between Sangsin Energy and National Plastic
Assuming the 90 days trading horizon Sangsin Energy Display is expected to under-perform the National Plastic. In addition to that, Sangsin Energy is 1.63 times more volatile than National Plastic Co. It trades about -0.41 of its total potential returns per unit of risk. National Plastic Co is currently generating about -0.11 per unit of volatility. If you would invest 271,500 in National Plastic Co on August 29, 2024 and sell it today you would lose (10,500) from holding National Plastic Co or give up 3.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sangsin Energy Display vs. National Plastic Co
Performance |
| Timeline |
| Sangsin Energy Display |
| National Plastic |
Sangsin Energy and National Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangsin Energy and National Plastic
The main advantage of trading using opposite Sangsin Energy and National Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangsin Energy position performs unexpectedly, National Plastic 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 National Plastic will offset losses from the drop in National Plastic's long position.| Sangsin Energy vs. Samsung Electronics Co | Sangsin Energy vs. Samsung Electronics Co | Sangsin Energy vs. Hyundai Motor Co | Sangsin Energy vs. Hyundai Motor |
| National Plastic vs. Hanjinkal | National Plastic vs. Samsung Heavy Industries | National Plastic vs. JYP Entertainment |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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