Correlation Between Koh Young and SH Energy
Can any of the company-specific risk be diversified away by investing in both Koh Young and SH Energy 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 Koh Young and SH Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koh Young Technology and SH Energy Chemical, you can compare the effects of market volatilities on Koh Young and SH Energy 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 Koh Young with a short position of SH Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koh Young and SH Energy.
Diversification Opportunities for Koh Young and SH Energy
Average diversification
The 3 months correlation between Koh and 002360 is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Koh Young Technology and SH Energy Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SH Energy Chemical and Koh Young 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 Koh Young Technology are associated (or correlated) with SH Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SH Energy Chemical has no effect on the direction of Koh Young i.e., Koh Young and SH Energy go up and down completely randomly.
Pair Corralation between Koh Young and SH Energy
Assuming the 90 days trading horizon Koh Young Technology is expected to under-perform the SH Energy. But the stock apears to be less risky and, when comparing its historical volatility, Koh Young Technology is 1.04 times less risky than SH Energy. The stock trades about -0.07 of its potential returns per unit of risk. The SH Energy Chemical is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 60,600 in SH Energy Chemical on October 13, 2024 and sell it today you would lose (7,000) from holding SH Energy Chemical or give up 11.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koh Young Technology vs. SH Energy Chemical
Performance |
| Timeline |
| Koh Young Technology |
| SH Energy Chemical |
Koh Young and SH Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koh Young and SH Energy
The main advantage of trading using opposite Koh Young and SH Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koh Young position performs unexpectedly, SH Energy 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 SH Energy will offset losses from the drop in SH Energy's long position.The idea behind Koh Young Technology and SH Energy Chemical pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SH Energy vs. Daishin Information Communications | SH Energy vs. Samyang Foods Co | SH Energy vs. Lotte Chilsung Beverage | SH Energy vs. LG Household Healthcare |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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