Correlation Between Parksystems Corp and Sangshin Electronics
Can any of the company-specific risk be diversified away by investing in both Parksystems Corp and Sangshin Electronics 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 Parksystems Corp and Sangshin Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parksystems Corp and Sangshin Electronics Co, you can compare the effects of market volatilities on Parksystems Corp and Sangshin Electronics 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 Parksystems Corp with a short position of Sangshin Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parksystems Corp and Sangshin Electronics.
Diversification Opportunities for Parksystems Corp and Sangshin Electronics
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Parksystems and Sangshin is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Parksystems Corp and Sangshin Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangshin Electronics and Parksystems Corp 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 Parksystems Corp are associated (or correlated) with Sangshin Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangshin Electronics has no effect on the direction of Parksystems Corp i.e., Parksystems Corp and Sangshin Electronics go up and down completely randomly.
Pair Corralation between Parksystems Corp and Sangshin Electronics
Assuming the 90 days trading horizon Parksystems Corp is expected to generate 1.71 times more return on investment than Sangshin Electronics. However, Parksystems Corp is 1.71 times more volatile than Sangshin Electronics Co. It trades about 0.14 of its potential returns per unit of risk. Sangshin Electronics Co is currently generating about -0.11 per unit of risk. If you would invest 22,700,000 in Parksystems Corp on November 6, 2024 and sell it today you would earn a total of 900,000 from holding Parksystems Corp or generate 3.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Parksystems Corp vs. Sangshin Electronics Co
Performance |
| Timeline |
| Parksystems Corp |
| Sangshin Electronics |
Parksystems Corp and Sangshin Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parksystems Corp and Sangshin Electronics
The main advantage of trading using opposite Parksystems Corp and Sangshin Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parksystems Corp position performs unexpectedly, Sangshin Electronics 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 Sangshin Electronics will offset losses from the drop in Sangshin Electronics' long position.| Parksystems Corp vs. Hanwha Chemical Corp | Parksystems Corp vs. TK Chemical | Parksystems Corp vs. Hanil Chemical Ind | Parksystems Corp vs. LG Household Healthcare |
| Sangshin Electronics vs. Daejoo Electronic Materials | Sangshin Electronics vs. Parksystems Corp | Sangshin Electronics vs. BH Co | Sangshin Electronics vs. Partron 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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