Correlation Between SS TECH and Homecast CoLtd
Can any of the company-specific risk be diversified away by investing in both SS TECH and Homecast CoLtd 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 Homecast CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SS TECH and Homecast CoLtd, you can compare the effects of market volatilities on SS TECH and Homecast CoLtd 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 Homecast CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of SS TECH and Homecast CoLtd.
Diversification Opportunities for SS TECH and Homecast CoLtd
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 101490 and Homecast is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding SS TECH and Homecast CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Homecast CoLtd 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 Homecast CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Homecast CoLtd has no effect on the direction of SS TECH i.e., SS TECH and Homecast CoLtd go up and down completely randomly.
Pair Corralation between SS TECH and Homecast CoLtd
Assuming the 90 days trading horizon SS TECH is expected to generate 0.96 times more return on investment than Homecast CoLtd. However, SS TECH is 1.04 times less risky than Homecast CoLtd. It trades about 0.37 of its potential returns per unit of risk. Homecast CoLtd is currently generating about -0.1 per unit of risk. If you would invest 2,560,000 in SS TECH on October 30, 2024 and sell it today you would earn a total of 530,000 from holding SS TECH or generate 20.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SS TECH vs. Homecast CoLtd
Performance |
| Timeline |
| SS TECH |
| Homecast CoLtd |
SS TECH and Homecast CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SS TECH and Homecast CoLtd
The main advantage of trading using opposite SS TECH and Homecast CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SS TECH position performs unexpectedly, Homecast CoLtd 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 Homecast CoLtd will offset losses from the drop in Homecast CoLtd's long position.| SS TECH vs. Samsung Electronics Co | SS TECH vs. Samsung Electronics Co | SS TECH vs. SK Hynix | SS TECH vs. HMM Co |
| Homecast CoLtd vs. Samsung Electronics Co | Homecast CoLtd vs. Samsung Electronics Co | Homecast CoLtd vs. SK Hynix | Homecast CoLtd vs. HMM 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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