Correlation Between Sangsin Energy and Jeju Beer
Can any of the company-specific risk be diversified away by investing in both Sangsin Energy and Jeju Beer 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 Jeju Beer 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 Jeju Beer Co, you can compare the effects of market volatilities on Sangsin Energy and Jeju Beer 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 Jeju Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangsin Energy and Jeju Beer.
Diversification Opportunities for Sangsin Energy and Jeju Beer
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sangsin and Jeju is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sangsin Energy Display and Jeju Beer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Beer 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 Jeju Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Beer has no effect on the direction of Sangsin Energy i.e., Sangsin Energy and Jeju Beer go up and down completely randomly.
Pair Corralation between Sangsin Energy and Jeju Beer
Assuming the 90 days trading horizon Sangsin Energy Display is expected to under-perform the Jeju Beer. But the stock apears to be less risky and, when comparing its historical volatility, Sangsin Energy Display is 1.8 times less risky than Jeju Beer. The stock trades about -0.39 of its potential returns per unit of risk. The Jeju Beer Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 297,000 in Jeju Beer Co on August 30, 2024 and sell it today you would earn a total of 17,500 from holding Jeju Beer Co or generate 5.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sangsin Energy Display vs. Jeju Beer Co
Performance |
| Timeline |
| Sangsin Energy Display |
| Jeju Beer |
Sangsin Energy and Jeju Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangsin Energy and Jeju Beer
The main advantage of trading using opposite Sangsin Energy and Jeju Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangsin Energy position performs unexpectedly, Jeju Beer 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 Jeju Beer will offset losses from the drop in Jeju Beer's long position.| Sangsin Energy vs. Samsung Electronics Co | Sangsin Energy vs. Samsung Electronics Co | Sangsin Energy vs. KB Financial Group | Sangsin Energy vs. Shinhan Financial Group |
| Jeju Beer vs. Sangsin Energy Display | Jeju Beer vs. Cots Technology Co | Jeju Beer vs. Eugene Technology CoLtd | Jeju Beer vs. People 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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