Correlation Between SIMMTECH and Daewoo Shipbuilding
Can any of the company-specific risk be diversified away by investing in both SIMMTECH and Daewoo Shipbuilding 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 SIMMTECH and Daewoo Shipbuilding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIMMTECH Co and Daewoo Shipbuilding, you can compare the effects of market volatilities on SIMMTECH and Daewoo Shipbuilding 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 SIMMTECH with a short position of Daewoo Shipbuilding. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIMMTECH and Daewoo Shipbuilding.
Diversification Opportunities for SIMMTECH and Daewoo Shipbuilding
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SIMMTECH and Daewoo is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding SIMMTECH Co and Daewoo Shipbuilding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewoo Shipbuilding and SIMMTECH 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 SIMMTECH Co are associated (or correlated) with Daewoo Shipbuilding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewoo Shipbuilding has no effect on the direction of SIMMTECH i.e., SIMMTECH and Daewoo Shipbuilding go up and down completely randomly.
Pair Corralation between SIMMTECH and Daewoo Shipbuilding
Assuming the 90 days trading horizon SIMMTECH Co is expected to under-perform the Daewoo Shipbuilding. But the stock apears to be less risky and, when comparing its historical volatility, SIMMTECH Co is 1.37 times less risky than Daewoo Shipbuilding. The stock trades about -0.11 of its potential returns per unit of risk. The Daewoo Shipbuilding is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 4,435,000 in Daewoo Shipbuilding on September 12, 2024 and sell it today you would lose (1,255,000) from holding Daewoo Shipbuilding or give up 28.3% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SIMMTECH Co vs. Daewoo Shipbuilding
Performance |
Timeline |
SIMMTECH |
Daewoo Shipbuilding |
SIMMTECH and Daewoo Shipbuilding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SIMMTECH and Daewoo Shipbuilding
The main advantage of trading using opposite SIMMTECH and Daewoo Shipbuilding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIMMTECH position performs unexpectedly, Daewoo Shipbuilding 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 Daewoo Shipbuilding will offset losses from the drop in Daewoo Shipbuilding's long position.SIMMTECH vs. Cube Entertainment | SIMMTECH vs. Dreamus Company | SIMMTECH vs. LG Energy Solution | SIMMTECH vs. Dongwon System |
Daewoo Shipbuilding vs. Dongbang Transport Logistics | Daewoo Shipbuilding vs. Sung Bo Chemicals | Daewoo Shipbuilding vs. V One Tech Co | Daewoo Shipbuilding vs. SK Chemicals 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |