Correlation Between Microfriend and Silla Sg
Can any of the company-specific risk be diversified away by investing in both Microfriend and Silla Sg 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 Microfriend and Silla Sg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microfriend and Silla Sg Co, you can compare the effects of market volatilities on Microfriend and Silla Sg 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 Microfriend with a short position of Silla Sg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microfriend and Silla Sg.
Diversification Opportunities for Microfriend and Silla Sg
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Microfriend and Silla is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Microfriend and Silla Sg Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silla Sg and Microfriend 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 Microfriend are associated (or correlated) with Silla Sg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silla Sg has no effect on the direction of Microfriend i.e., Microfriend and Silla Sg go up and down completely randomly.
Pair Corralation between Microfriend and Silla Sg
Assuming the 90 days trading horizon Microfriend is expected to under-perform the Silla Sg. In addition to that, Microfriend is 5.27 times more volatile than Silla Sg Co. It trades about -0.04 of its total potential returns per unit of risk. Silla Sg Co is currently generating about -0.13 per unit of volatility. If you would invest 624,000 in Silla Sg Co on August 29, 2024 and sell it today you would lose (35,000) from holding Silla Sg Co or give up 5.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microfriend vs. Silla Sg Co
Performance |
| Timeline |
| Microfriend |
| Silla Sg |
Microfriend and Silla Sg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microfriend and Silla Sg
The main advantage of trading using opposite Microfriend and Silla Sg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microfriend position performs unexpectedly, Silla Sg 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 Silla Sg will offset losses from the drop in Silla Sg's long position.| Microfriend vs. SK Hynix | Microfriend vs. LX Semicon Co | Microfriend vs. Tokai Carbon Korea | Microfriend vs. People Technology |
| Silla Sg vs. Samsung Electronics Co | Silla Sg vs. Samsung Electronics Co | Silla Sg vs. Hyundai Motor Co | Silla Sg vs. Hyundai Motor |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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