Correlation Between SS TECH and VAIV
Can any of the company-specific risk be diversified away by investing in both SS TECH and VAIV 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 VAIV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SS TECH and VAIV Co, you can compare the effects of market volatilities on SS TECH and VAIV 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 VAIV. Check out your portfolio center. Please also check ongoing floating volatility patterns of SS TECH and VAIV.
Diversification Opportunities for SS TECH and VAIV
Very poor diversification
The 3 months correlation between 101490 and VAIV is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding SS TECH and VAIV Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VAIV 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 VAIV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VAIV has no effect on the direction of SS TECH i.e., SS TECH and VAIV go up and down completely randomly.
Pair Corralation between SS TECH and VAIV
Assuming the 90 days trading horizon SS TECH is expected to generate 0.81 times more return on investment than VAIV. However, SS TECH is 1.23 times less risky than VAIV. It trades about 0.0 of its potential returns per unit of risk. VAIV Co is currently generating about -0.03 per unit of risk. If you would invest 2,784,478 in SS TECH on September 4, 2024 and sell it today you would lose (609,478) from holding SS TECH or give up 21.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SS TECH vs. VAIV Co
Performance |
| Timeline |
| SS TECH |
| VAIV |
SS TECH and VAIV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SS TECH and VAIV
The main advantage of trading using opposite SS TECH and VAIV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SS TECH position performs unexpectedly, VAIV 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 VAIV will offset losses from the drop in VAIV's long position.| SS TECH vs. Dongsin Engineering Construction | SS TECH vs. Doosan Fuel Cell | SS TECH vs. Daishin Balance 1 | SS TECH vs. Total Soft Bank |
| VAIV vs. Samyoung Electronics Co | VAIV vs. SS TECH | VAIV vs. Sangshin Electronics Co | VAIV vs. Sunny Electronics 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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