Correlation Between Sangshin Electronics and Choil Aluminum
Can any of the company-specific risk be diversified away by investing in both Sangshin Electronics and Choil Aluminum 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 Sangshin Electronics and Choil Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sangshin Electronics Co and Choil Aluminum, you can compare the effects of market volatilities on Sangshin Electronics and Choil Aluminum 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 Sangshin Electronics with a short position of Choil Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangshin Electronics and Choil Aluminum.
Diversification Opportunities for Sangshin Electronics and Choil Aluminum
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sangshin and Choil is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Sangshin Electronics Co and Choil Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choil Aluminum and Sangshin Electronics 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 Sangshin Electronics Co are associated (or correlated) with Choil Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choil Aluminum has no effect on the direction of Sangshin Electronics i.e., Sangshin Electronics and Choil Aluminum go up and down completely randomly.
Pair Corralation between Sangshin Electronics and Choil Aluminum
Assuming the 90 days trading horizon Sangshin Electronics Co is expected to generate 1.16 times more return on investment than Choil Aluminum. However, Sangshin Electronics is 1.16 times more volatile than Choil Aluminum. It trades about 0.01 of its potential returns per unit of risk. Choil Aluminum is currently generating about -0.01 per unit of risk. If you would invest 319,000 in Sangshin Electronics Co on September 3, 2024 and sell it today you would lose (26,000) from holding Sangshin Electronics Co or give up 8.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sangshin Electronics Co vs. Choil Aluminum
Performance |
| Timeline |
| Sangshin Electronics |
| Choil Aluminum |
Sangshin Electronics and Choil Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangshin Electronics and Choil Aluminum
The main advantage of trading using opposite Sangshin Electronics and Choil Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangshin Electronics position performs unexpectedly, Choil Aluminum 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 Choil Aluminum will offset losses from the drop in Choil Aluminum's long position.| Sangshin Electronics vs. Daejoo Electronic Materials | Sangshin Electronics vs. Parksystems Corp | Sangshin Electronics vs. BH Co | Sangshin Electronics vs. Partron Co |
| Choil Aluminum vs. Busan Industrial Co | Choil Aluminum vs. UNISEM Co | Choil Aluminum vs. RPBio Inc | Choil Aluminum vs. Finebesteel |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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