Correlation Between Sangsin Energy and Poongsan
Can any of the company-specific risk be diversified away by investing in both Sangsin Energy and Poongsan 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 Poongsan 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 Poongsan, you can compare the effects of market volatilities on Sangsin Energy and Poongsan 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 Poongsan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangsin Energy and Poongsan.
Diversification Opportunities for Sangsin Energy and Poongsan
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sangsin and Poongsan is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sangsin Energy Display and Poongsan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poongsan 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 Poongsan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poongsan has no effect on the direction of Sangsin Energy i.e., Sangsin Energy and Poongsan go up and down completely randomly.
Pair Corralation between Sangsin Energy and Poongsan
Assuming the 90 days trading horizon Sangsin Energy Display is expected to under-perform the Poongsan. In addition to that, Sangsin Energy is 1.13 times more volatile than Poongsan. It trades about -0.18 of its total potential returns per unit of risk. Poongsan is currently generating about -0.13 per unit of volatility. If you would invest 6,690,000 in Poongsan on November 6, 2024 and sell it today you would lose (1,390,000) from holding Poongsan or give up 20.78% 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. Poongsan
Performance |
| Timeline |
| Sangsin Energy Display |
| Poongsan |
Sangsin Energy and Poongsan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangsin Energy and Poongsan
The main advantage of trading using opposite Sangsin Energy and Poongsan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangsin Energy position performs unexpectedly, Poongsan 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 Poongsan will offset losses from the drop in Poongsan's long position.| Sangsin Energy vs. Sung Bo Chemicals | Sangsin Energy vs. DSC Investment | Sangsin Energy vs. Sangsangin Investment Securities | Sangsin Energy vs. EBEST Investment Securities |
| Poongsan vs. LG Chemicals | Poongsan vs. POSCO Holdings | Poongsan vs. Hanwha Solutions | Poongsan vs. Lotte Chemical Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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