Correlation Between SS TECH and Nepes
Can any of the company-specific risk be diversified away by investing in both SS TECH and Nepes 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 SS TECH and Nepes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SS TECH and Nepes, you can compare the effects of market volatilities on SS TECH and Nepes 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 SS TECH with a short position of Nepes. Check out your portfolio center. Please also check ongoing floating volatility patterns of SS TECH and Nepes.
Diversification Opportunities for SS TECH and Nepes
Almost no diversification
The 3 months correlation between 101490 and Nepes is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding SS TECH and Nepes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nepes and SS TECH 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 SS TECH are associated (or correlated) with Nepes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nepes has no effect on the direction of SS TECH i.e., SS TECH and Nepes go up and down completely randomly.
Pair Corralation between SS TECH and Nepes
Assuming the 90 days trading horizon SS TECH is expected to generate 1.21 times more return on investment than Nepes. However, SS TECH is 1.21 times more volatile than Nepes. It trades about 0.04 of its potential returns per unit of risk. Nepes is currently generating about -0.15 per unit of risk. If you would invest 2,315,000 in SS TECH on August 29, 2024 and sell it today you would earn a total of 50,000 from holding SS TECH or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SS TECH vs. Nepes
Performance |
| Timeline |
| SS TECH |
| Nepes |
SS TECH and Nepes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SS TECH and Nepes
The main advantage of trading using opposite SS TECH and Nepes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SS TECH position performs unexpectedly, Nepes 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 Nepes will offset losses from the drop in Nepes' long position.| SS TECH vs. Korea Real Estate | SS TECH vs. Korea Ratings Co | SS TECH vs. IQuest Co | SS TECH vs. Wonbang Tech Co |
| Nepes vs. Dongjin Semichem Co | Nepes vs. SFA Semicon Co | Nepes vs. Seoul Semiconductor Co | Nepes vs. EO Technics Co |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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