Correlation Between Sangsin Energy and Taegu Broadcasting
Can any of the company-specific risk be diversified away by investing in both Sangsin Energy and Taegu Broadcasting 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 Taegu Broadcasting 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 Taegu Broadcasting, you can compare the effects of market volatilities on Sangsin Energy and Taegu Broadcasting 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 Taegu Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangsin Energy and Taegu Broadcasting.
Diversification Opportunities for Sangsin Energy and Taegu Broadcasting
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sangsin and Taegu is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sangsin Energy Display and Taegu Broadcasting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taegu Broadcasting 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 Taegu Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taegu Broadcasting has no effect on the direction of Sangsin Energy i.e., Sangsin Energy and Taegu Broadcasting go up and down completely randomly.
Pair Corralation between Sangsin Energy and Taegu Broadcasting
Assuming the 90 days trading horizon Sangsin Energy Display is expected to generate 1.48 times more return on investment than Taegu Broadcasting. However, Sangsin Energy is 1.48 times more volatile than Taegu Broadcasting. It trades about 0.11 of its potential returns per unit of risk. Taegu Broadcasting is currently generating about -0.09 per unit of risk. If you would invest 750,792 in Sangsin Energy Display on October 14, 2024 and sell it today you would earn a total of 37,208 from holding Sangsin Energy Display or generate 4.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sangsin Energy Display vs. Taegu Broadcasting
Performance |
| Timeline |
| Sangsin Energy Display |
| Taegu Broadcasting |
Sangsin Energy and Taegu Broadcasting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangsin Energy and Taegu Broadcasting
The main advantage of trading using opposite Sangsin Energy and Taegu Broadcasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangsin Energy position performs unexpectedly, Taegu Broadcasting 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 Taegu Broadcasting will offset losses from the drop in Taegu Broadcasting's long position.| Sangsin Energy vs. Korea Alcohol Industrial | Sangsin Energy vs. Shinil Electronics Co | Sangsin Energy vs. Daewoo Electronic Components | Sangsin Energy vs. Seoul Electronics Telecom |
| Taegu Broadcasting vs. Iljin Display | Taegu Broadcasting vs. Daesung Industrial Co | Taegu Broadcasting vs. Drb Industrial | Taegu Broadcasting vs. Sangsin Energy Display |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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