Correlation Between Sangsin Energy and SCI Information
Can any of the company-specific risk be diversified away by investing in both Sangsin Energy and SCI Information 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 SCI Information 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 SCI Information Service, you can compare the effects of market volatilities on Sangsin Energy and SCI Information 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 SCI Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangsin Energy and SCI Information.
Diversification Opportunities for Sangsin Energy and SCI Information
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sangsin and SCI is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Sangsin Energy Display and SCI Information Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCI Information Service 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 SCI Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCI Information Service has no effect on the direction of Sangsin Energy i.e., Sangsin Energy and SCI Information go up and down completely randomly.
Pair Corralation between Sangsin Energy and SCI Information
Assuming the 90 days trading horizon Sangsin Energy Display is expected to under-perform the SCI Information. In addition to that, Sangsin Energy is 1.18 times more volatile than SCI Information Service. It trades about -0.03 of its total potential returns per unit of risk. SCI Information Service is currently generating about -0.02 per unit of volatility. If you would invest 371,262 in SCI Information Service on September 26, 2024 and sell it today you would lose (140,262) from holding SCI Information Service or give up 37.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sangsin Energy Display vs. SCI Information Service
Performance |
| Timeline |
| Sangsin Energy Display |
| SCI Information Service |
Sangsin Energy and SCI Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangsin Energy and SCI Information
The main advantage of trading using opposite Sangsin Energy and SCI Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangsin Energy position performs unexpectedly, SCI Information 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 SCI Information will offset losses from the drop in SCI Information'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 |
| SCI Information vs. KB Financial Group | SCI Information vs. Shinhan Financial Group | SCI Information vs. Hyundai Motor | SCI Information vs. Hyundai Motor Co |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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