Correlation Between MPLUS Corp and Sangsin Energy
Can any of the company-specific risk be diversified away by investing in both MPLUS Corp and Sangsin Energy 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 MPLUS Corp and Sangsin Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between mPLUS Corp and Sangsin Energy Display, you can compare the effects of market volatilities on MPLUS Corp and Sangsin Energy 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 MPLUS Corp with a short position of Sangsin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of MPLUS Corp and Sangsin Energy.
Diversification Opportunities for MPLUS Corp and Sangsin Energy
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between MPLUS and Sangsin is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding mPLUS Corp and Sangsin Energy Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsin Energy Display and MPLUS Corp 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 mPLUS Corp are associated (or correlated) with Sangsin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsin Energy Display has no effect on the direction of MPLUS Corp i.e., MPLUS Corp and Sangsin Energy go up and down completely randomly.
Pair Corralation between MPLUS Corp and Sangsin Energy
Assuming the 90 days trading horizon mPLUS Corp is expected to generate 0.94 times more return on investment than Sangsin Energy. However, mPLUS Corp is 1.06 times less risky than Sangsin Energy. It trades about -0.39 of its potential returns per unit of risk. Sangsin Energy Display is currently generating about -0.4 per unit of risk. If you would invest 971,000 in mPLUS Corp on August 29, 2024 and sell it today you would lose (184,000) from holding mPLUS Corp or give up 18.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
mPLUS Corp vs. Sangsin Energy Display
Performance |
| Timeline |
| mPLUS Corp |
| Sangsin Energy Display |
MPLUS Corp and Sangsin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MPLUS Corp and Sangsin Energy
The main advantage of trading using opposite MPLUS Corp and Sangsin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MPLUS Corp position performs unexpectedly, Sangsin Energy 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 Sangsin Energy will offset losses from the drop in Sangsin Energy's long position.| MPLUS Corp vs. Korean Reinsurance Co | MPLUS Corp vs. DB Insurance Co | MPLUS Corp vs. Dongbu Insurance Co | MPLUS Corp vs. Hyosung Advanced Materials |
| Sangsin Energy vs. Samsung Electronics Co | Sangsin Energy vs. Samsung Electronics Co | Sangsin Energy vs. KB Financial Group | Sangsin Energy vs. Shinhan Financial Group |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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