Correlation Between SGA Solutions and KMH Hitech
Can any of the company-specific risk be diversified away by investing in both SGA Solutions and KMH Hitech 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 KMH Hitech 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 KMH Hitech Co, you can compare the effects of market volatilities on SGA Solutions and KMH Hitech 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 KMH Hitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of SGA Solutions and KMH Hitech.
Diversification Opportunities for SGA Solutions and KMH Hitech
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SGA and KMH is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding SGA Solutions CoLtd and KMH Hitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KMH Hitech 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 KMH Hitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KMH Hitech has no effect on the direction of SGA Solutions i.e., SGA Solutions and KMH Hitech go up and down completely randomly.
Pair Corralation between SGA Solutions and KMH Hitech
Assuming the 90 days trading horizon SGA Solutions is expected to generate 2.42 times less return on investment than KMH Hitech. In addition to that, SGA Solutions is 1.57 times more volatile than KMH Hitech Co. It trades about 0.13 of its total potential returns per unit of risk. KMH Hitech Co is currently generating about 0.48 per unit of volatility. If you would invest 87,300 in KMH Hitech Co on October 30, 2024 and sell it today you would earn a total of 12,800 from holding KMH Hitech Co or generate 14.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SGA Solutions CoLtd vs. KMH Hitech Co
Performance |
| Timeline |
| SGA Solutions CoLtd |
| KMH Hitech |
SGA Solutions and KMH Hitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SGA Solutions and KMH Hitech
The main advantage of trading using opposite SGA Solutions and KMH Hitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SGA Solutions position performs unexpectedly, KMH Hitech 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 KMH Hitech will offset losses from the drop in KMH Hitech's long position.| SGA Solutions vs. Samsung Electronics Co | SGA Solutions vs. Samsung Electronics Co | SGA Solutions vs. SK Hynix | SGA Solutions vs. HMM Co |
| KMH Hitech vs. Insung Information Co | KMH Hitech vs. Daewon Chemical Co | KMH Hitech vs. Infinitt Healthcare Co | KMH Hitech vs. SH Energy Chemical |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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