Correlation Between DeviceENGCOLtd and SOOSAN INT
Can any of the company-specific risk be diversified away by investing in both DeviceENGCOLtd and SOOSAN INT 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 DeviceENGCOLtd and SOOSAN INT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DeviceENGCOLtd and SOOSAN INT Co, you can compare the effects of market volatilities on DeviceENGCOLtd and SOOSAN INT 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 DeviceENGCOLtd with a short position of SOOSAN INT. Check out your portfolio center. Please also check ongoing floating volatility patterns of DeviceENGCOLtd and SOOSAN INT.
Diversification Opportunities for DeviceENGCOLtd and SOOSAN INT
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DeviceENGCOLtd and SOOSAN is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding DeviceENGCOLtd and SOOSAN INT Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOOSAN INT and DeviceENGCOLtd 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 DeviceENGCOLtd are associated (or correlated) with SOOSAN INT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOOSAN INT has no effect on the direction of DeviceENGCOLtd i.e., DeviceENGCOLtd and SOOSAN INT go up and down completely randomly.
Pair Corralation between DeviceENGCOLtd and SOOSAN INT
Assuming the 90 days trading horizon DeviceENGCOLtd is expected to generate 1.11 times more return on investment than SOOSAN INT. However, DeviceENGCOLtd is 1.11 times more volatile than SOOSAN INT Co. It trades about -0.12 of its potential returns per unit of risk. SOOSAN INT Co is currently generating about -0.19 per unit of risk. If you would invest 1,439,000 in DeviceENGCOLtd on September 2, 2024 and sell it today you would lose (186,000) from holding DeviceENGCOLtd or give up 12.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DeviceENGCOLtd vs. SOOSAN INT Co
Performance |
| Timeline |
| DeviceENGCOLtd |
| SOOSAN INT |
DeviceENGCOLtd and SOOSAN INT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DeviceENGCOLtd and SOOSAN INT
The main advantage of trading using opposite DeviceENGCOLtd and SOOSAN INT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DeviceENGCOLtd position performs unexpectedly, SOOSAN INT 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 SOOSAN INT will offset losses from the drop in SOOSAN INT's long position.| DeviceENGCOLtd vs. SK Hynix | DeviceENGCOLtd vs. LX Semicon Co | DeviceENGCOLtd vs. People Technology | DeviceENGCOLtd vs. SIMMTECH 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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