Correlation Between MS Autotech and SFA Semicon
Can any of the company-specific risk be diversified away by investing in both MS Autotech and SFA Semicon 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 MS Autotech and SFA Semicon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MS Autotech CoLtd and SFA Semicon Co, you can compare the effects of market volatilities on MS Autotech and SFA Semicon 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 MS Autotech with a short position of SFA Semicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of MS Autotech and SFA Semicon.
Diversification Opportunities for MS Autotech and SFA Semicon
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between 123040 and SFA is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding MS Autotech CoLtd and SFA Semicon Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFA Semicon and MS Autotech 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 MS Autotech CoLtd are associated (or correlated) with SFA Semicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SFA Semicon has no effect on the direction of MS Autotech i.e., MS Autotech and SFA Semicon go up and down completely randomly.
Pair Corralation between MS Autotech and SFA Semicon
Assuming the 90 days trading horizon MS Autotech CoLtd is expected to under-perform the SFA Semicon. In addition to that, MS Autotech is 1.25 times more volatile than SFA Semicon Co. It trades about -0.2 of its total potential returns per unit of risk. SFA Semicon Co is currently generating about -0.25 per unit of volatility. If you would invest 368,000 in SFA Semicon Co on September 1, 2024 and sell it today you would lose (46,500) from holding SFA Semicon Co or give up 12.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MS Autotech CoLtd vs. SFA Semicon Co
Performance |
| Timeline |
| MS Autotech CoLtd |
| SFA Semicon |
MS Autotech and SFA Semicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MS Autotech and SFA Semicon
The main advantage of trading using opposite MS Autotech and SFA Semicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MS Autotech position performs unexpectedly, SFA Semicon 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 SFA Semicon will offset losses from the drop in SFA Semicon's long position.| MS Autotech vs. LG Display | MS Autotech vs. Hyundai Motor | MS Autotech vs. Hyundai Motor Co | MS Autotech vs. Hyundai Motor Co |
| SFA Semicon vs. SFA Engineering | SFA Semicon vs. Nepes | SFA Semicon vs. LEENO Industrial | SFA Semicon vs. Seoul Semiconductor 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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