Correlation Between SGA Solutions and Kia Corp
Can any of the company-specific risk be diversified away by investing in both SGA Solutions and Kia Corp 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 SGA Solutions and Kia Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SGA Solutions CoLtd and Kia Corp, you can compare the effects of market volatilities on SGA Solutions and Kia Corp 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 SGA Solutions with a short position of Kia Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of SGA Solutions and Kia Corp.
Diversification Opportunities for SGA Solutions and Kia Corp
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between SGA and Kia is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding SGA Solutions CoLtd and Kia Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kia Corp and SGA Solutions 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 SGA Solutions CoLtd are associated (or correlated) with Kia Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kia Corp has no effect on the direction of SGA Solutions i.e., SGA Solutions and Kia Corp go up and down completely randomly.
Pair Corralation between SGA Solutions and Kia Corp
Assuming the 90 days trading horizon SGA Solutions CoLtd is expected to generate 1.64 times more return on investment than Kia Corp. However, SGA Solutions is 1.64 times more volatile than Kia Corp. It trades about 0.08 of its potential returns per unit of risk. Kia Corp is currently generating about 0.07 per unit of risk. If you would invest 47,900 in SGA Solutions CoLtd on November 7, 2024 and sell it today you would earn a total of 1,300 from holding SGA Solutions CoLtd or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SGA Solutions CoLtd vs. Kia Corp
Performance |
| Timeline |
| SGA Solutions CoLtd |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Kia Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
SGA Solutions and Kia Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SGA Solutions and Kia Corp
The main advantage of trading using opposite SGA Solutions and Kia Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SGA Solutions position performs unexpectedly, Kia Corp 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 Kia Corp will offset losses from the drop in Kia Corp's long position.| SGA Solutions vs. Samsung Electronics Co | SGA Solutions vs. Samsung Electronics Co | SGA Solutions vs. Hyundai Motor Co | SGA Solutions vs. LG Electronics |
| Kia Corp vs. Samsung Electronics Co | Kia Corp vs. Samsung Electronics Co | Kia Corp vs. Hyundai Motor Co | Kia Corp vs. LG Electronics |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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