Correlation Between Sangsin Energy and TAEYANG
Can any of the company-specific risk be diversified away by investing in both Sangsin Energy and TAEYANG 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 TAEYANG 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 TAEYANG, you can compare the effects of market volatilities on Sangsin Energy and TAEYANG 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 TAEYANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangsin Energy and TAEYANG.
Diversification Opportunities for Sangsin Energy and TAEYANG
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sangsin and TAEYANG is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sangsin Energy Display and TAEYANG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAEYANG 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 TAEYANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAEYANG has no effect on the direction of Sangsin Energy i.e., Sangsin Energy and TAEYANG go up and down completely randomly.
Pair Corralation between Sangsin Energy and TAEYANG
Assuming the 90 days trading horizon Sangsin Energy Display is expected to under-perform the TAEYANG. In addition to that, Sangsin Energy is 2.75 times more volatile than TAEYANG. It trades about -0.03 of its total potential returns per unit of risk. TAEYANG is currently generating about -0.02 per unit of volatility. If you would invest 754,569 in TAEYANG on September 26, 2024 and sell it today you would lose (108,569) from holding TAEYANG or give up 14.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Sangsin Energy Display vs. TAEYANG
Performance |
| Timeline |
| Sangsin Energy Display |
| TAEYANG |
Sangsin Energy and TAEYANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangsin Energy and TAEYANG
The main advantage of trading using opposite Sangsin Energy and TAEYANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangsin Energy position performs unexpectedly, TAEYANG 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 TAEYANG will offset losses from the drop in TAEYANG'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 |
| TAEYANG vs. Heungkuk Metaltech CoLtd | TAEYANG vs. LG Household Healthcare | TAEYANG vs. MetaLabs Co | TAEYANG vs. Daishin Information 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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