Correlation Between High Tech and Sinil Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both High Tech and Sinil Pharmaceutical 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 High Tech and Sinil Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Tech Pharm and Sinil Pharmaceutical Co, you can compare the effects of market volatilities on High Tech and Sinil Pharmaceutical 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 High Tech with a short position of Sinil Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Tech and Sinil Pharmaceutical.
Diversification Opportunities for High Tech and Sinil Pharmaceutical
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between High and Sinil is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding High Tech Pharm and Sinil Pharmaceutical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinil Pharmaceutical and High 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 High Tech Pharm are associated (or correlated) with Sinil Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinil Pharmaceutical has no effect on the direction of High Tech i.e., High Tech and Sinil Pharmaceutical go up and down completely randomly.
Pair Corralation between High Tech and Sinil Pharmaceutical
Assuming the 90 days trading horizon High Tech Pharm is expected to generate 1.48 times more return on investment than Sinil Pharmaceutical. However, High Tech is 1.48 times more volatile than Sinil Pharmaceutical Co. It trades about 0.07 of its potential returns per unit of risk. Sinil Pharmaceutical Co is currently generating about -0.02 per unit of risk. If you would invest 728,015 in High Tech Pharm on August 28, 2024 and sell it today you would earn a total of 686,985 from holding High Tech Pharm or generate 94.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Tech Pharm vs. Sinil Pharmaceutical Co
Performance |
| Timeline |
| High Tech Pharm |
| Sinil Pharmaceutical |
High Tech and Sinil Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Tech and Sinil Pharmaceutical
The main advantage of trading using opposite High Tech and Sinil Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Tech position performs unexpectedly, Sinil Pharmaceutical 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 Sinil Pharmaceutical will offset losses from the drop in Sinil Pharmaceutical's long position.| High Tech vs. Kolon Life Science | High Tech vs. Aminologics CoLtd | High Tech vs. Withuspharmaceutical CoLtd |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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