Correlation Between Sangshin Electronics and People Technology
Can any of the company-specific risk be diversified away by investing in both Sangshin Electronics and People Technology 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 People Technology 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 People Technology, you can compare the effects of market volatilities on Sangshin Electronics and People Technology 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 People Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangshin Electronics and People Technology.
Diversification Opportunities for Sangshin Electronics and People Technology
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sangshin and People is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Sangshin Electronics Co and People Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on People Technology 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 People Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of People Technology has no effect on the direction of Sangshin Electronics i.e., Sangshin Electronics and People Technology go up and down completely randomly.
Pair Corralation between Sangshin Electronics and People Technology
Assuming the 90 days trading horizon Sangshin Electronics is expected to generate 1.11 times less return on investment than People Technology. In addition to that, Sangshin Electronics is 1.12 times more volatile than People Technology. It trades about 0.01 of its total potential returns per unit of risk. People Technology is currently generating about 0.01 per unit of volatility. If you would invest 4,644,845 in People Technology on September 4, 2024 and sell it today you would lose (284,845) from holding People Technology or give up 6.13% 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. People Technology
Performance |
| Timeline |
| Sangshin Electronics |
| People Technology |
Sangshin Electronics and People Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangshin Electronics and People Technology
The main advantage of trading using opposite Sangshin Electronics and People Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangshin Electronics position performs unexpectedly, People Technology 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 People Technology will offset losses from the drop in People Technology's long position.| Sangshin Electronics vs. Daejoo Electronic Materials | Sangshin Electronics vs. Parksystems Corp | Sangshin Electronics vs. BH Co | Sangshin Electronics vs. Partron Co |
| People Technology vs. Hanmi Semiconductor Co | People Technology vs. Shinil Electronics Co | People Technology vs. LG Chemicals | People Technology vs. Sangshin Electronics 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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