Correlation Between Settlebank and Sangsangin Investment
Can any of the company-specific risk be diversified away by investing in both Settlebank and Sangsangin Investment 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 Settlebank and Sangsangin Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Settlebank and Sangsangin Investment Securities, you can compare the effects of market volatilities on Settlebank and Sangsangin Investment 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 Settlebank with a short position of Sangsangin Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Settlebank and Sangsangin Investment.
Diversification Opportunities for Settlebank and Sangsangin Investment
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Settlebank and Sangsangin is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Settlebank and Sangsangin Investment Securiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsangin Investment and Settlebank 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 Settlebank are associated (or correlated) with Sangsangin Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsangin Investment has no effect on the direction of Settlebank i.e., Settlebank and Sangsangin Investment go up and down completely randomly.
Pair Corralation between Settlebank and Sangsangin Investment
Assuming the 90 days trading horizon Settlebank is expected to generate 1.62 times more return on investment than Sangsangin Investment. However, Settlebank is 1.62 times more volatile than Sangsangin Investment Securities. It trades about -0.02 of its potential returns per unit of risk. Sangsangin Investment Securities is currently generating about -0.17 per unit of risk. If you would invest 1,555,000 in Settlebank on November 3, 2024 and sell it today you would lose (153,000) from holding Settlebank or give up 9.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Settlebank vs. Sangsangin Investment Securiti
Performance |
| Timeline |
| Settlebank |
| Sangsangin Investment |
Settlebank and Sangsangin Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Settlebank and Sangsangin Investment
The main advantage of trading using opposite Settlebank and Sangsangin Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Settlebank position performs unexpectedly, Sangsangin Investment 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 Sangsangin Investment will offset losses from the drop in Sangsangin Investment's long position.| Settlebank vs. Daou Data Corp | Settlebank vs. Global Standard Technology | Settlebank vs. Digital Imaging Technology | Settlebank vs. NICE Information Service |
| Sangsangin Investment vs. DataSolution | Sangsangin Investment vs. Lotte Data Communication | Sangsangin Investment vs. JYP Entertainment Corp | Sangsangin Investment vs. Seoul Electronics Telecom |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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