Correlation Between Sangsin Energy and Korea New
Can any of the company-specific risk be diversified away by investing in both Sangsin Energy and Korea New 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 Korea New 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 Korea New Network, you can compare the effects of market volatilities on Sangsin Energy and Korea New 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 Korea New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangsin Energy and Korea New.
Diversification Opportunities for Sangsin Energy and Korea New
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sangsin and Korea is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Sangsin Energy Display and Korea New Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea New Network 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 Korea New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea New Network has no effect on the direction of Sangsin Energy i.e., Sangsin Energy and Korea New go up and down completely randomly.
Pair Corralation between Sangsin Energy and Korea New
Assuming the 90 days trading horizon Sangsin Energy Display is expected to under-perform the Korea New. In addition to that, Sangsin Energy is 1.58 times more volatile than Korea New Network. It trades about -0.2 of its total potential returns per unit of risk. Korea New Network is currently generating about -0.04 per unit of volatility. If you would invest 85,500 in Korea New Network on August 31, 2024 and sell it today you would lose (8,400) from holding Korea New Network or give up 9.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sangsin Energy Display vs. Korea New Network
Performance |
| Timeline |
| Sangsin Energy Display |
| Korea New Network |
Sangsin Energy and Korea New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangsin Energy and Korea New
The main advantage of trading using opposite Sangsin Energy and Korea New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangsin Energy position performs unexpectedly, Korea New 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 Korea New will offset losses from the drop in Korea New's long position.| Sangsin Energy vs. Korea New Network | Sangsin Energy vs. ICD Co | Sangsin Energy vs. DYPNF CoLtd | Sangsin Energy vs. Busan Industrial Co |
| Korea New vs. Ilji Technology Co | Korea New vs. Raontech | Korea New vs. HB Technology TD | Korea New vs. Koh Young Technology |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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