Correlation Between Alton Sports and Samwon Steel
Can any of the company-specific risk be diversified away by investing in both Alton Sports and Samwon Steel 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 Alton Sports and Samwon Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alton Sports CoLtd and Samwon Steel, you can compare the effects of market volatilities on Alton Sports and Samwon Steel 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 Alton Sports with a short position of Samwon Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alton Sports and Samwon Steel.
Diversification Opportunities for Alton Sports and Samwon Steel
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alton and Samwon is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Alton Sports CoLtd and Samwon Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samwon Steel and Alton Sports 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 Alton Sports CoLtd are associated (or correlated) with Samwon Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samwon Steel has no effect on the direction of Alton Sports i.e., Alton Sports and Samwon Steel go up and down completely randomly.
Pair Corralation between Alton Sports and Samwon Steel
Assuming the 90 days trading horizon Alton Sports CoLtd is expected to under-perform the Samwon Steel. But the stock apears to be less risky and, when comparing its historical volatility, Alton Sports CoLtd is 1.07 times less risky than Samwon Steel. The stock trades about -0.19 of its potential returns per unit of risk. The Samwon Steel is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 255,000 in Samwon Steel on August 28, 2024 and sell it today you would lose (3,000) from holding Samwon Steel or give up 1.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alton Sports CoLtd vs. Samwon Steel
Performance |
| Timeline |
| Alton Sports CoLtd |
| Samwon Steel |
Alton Sports and Samwon Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alton Sports and Samwon Steel
The main advantage of trading using opposite Alton Sports and Samwon Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alton Sports position performs unexpectedly, Samwon Steel 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 Samwon Steel will offset losses from the drop in Samwon Steel's long position.| Alton Sports vs. Busan Industrial Co | Alton Sports vs. Busan Ind | Alton Sports vs. Mirae Asset Daewoo | Alton Sports vs. UNISEM Co |
| Samwon Steel vs. Nice Information Telecommunication | Samwon Steel vs. iNtRON Biotechnology | Samwon Steel vs. Daishin Information Communications | Samwon Steel vs. Alton Sports CoLtd |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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