Correlation Between Sangsin Energy and Daol Investment
Can any of the company-specific risk be diversified away by investing in both Sangsin Energy and Daol 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 Sangsin Energy and Daol Investment 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 Daol Investment Securities, you can compare the effects of market volatilities on Sangsin Energy and Daol 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 Sangsin Energy with a short position of Daol Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangsin Energy and Daol Investment.
Diversification Opportunities for Sangsin Energy and Daol Investment
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sangsin and Daol is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Sangsin Energy Display and Daol Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daol Investment Secu 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 Daol Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daol Investment Secu has no effect on the direction of Sangsin Energy i.e., Sangsin Energy and Daol Investment go up and down completely randomly.
Pair Corralation between Sangsin Energy and Daol Investment
Assuming the 90 days trading horizon Sangsin Energy Display is expected to under-perform the Daol Investment. In addition to that, Sangsin Energy is 1.08 times more volatile than Daol Investment Securities. It trades about -0.03 of its total potential returns per unit of risk. Daol Investment Securities is currently generating about 0.03 per unit of volatility. If you would invest 289,211 in Daol Investment Securities on September 28, 2024 and sell it today you would earn a total of 77,289 from holding Daol Investment Securities or generate 26.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sangsin Energy Display vs. Daol Investment Securities
Performance |
| Timeline |
| Sangsin Energy Display |
| Daol Investment Secu |
Sangsin Energy and Daol Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangsin Energy and Daol Investment
The main advantage of trading using opposite Sangsin Energy and Daol Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangsin Energy position performs unexpectedly, Daol 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 Daol Investment will offset losses from the drop in Daol Investment's long position.| Sangsin Energy vs. Busan Industrial Co | Sangsin Energy vs. Busan Ind | Sangsin Energy vs. Mirae Asset Daewoo | Sangsin Energy vs. Shinhan WTI Futures |
| Daol Investment vs. Nice Information Telecommunication | Daol Investment vs. Daesung Hi Tech Co | Daol Investment vs. Sangsin Energy Display | Daol Investment vs. Digital Power Communications |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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