Correlation Between Sangshin Electronics and Design
Can any of the company-specific risk be diversified away by investing in both Sangshin Electronics and Design 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 Design 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 Design Co, you can compare the effects of market volatilities on Sangshin Electronics and Design 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 Design. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangshin Electronics and Design.
Diversification Opportunities for Sangshin Electronics and Design
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sangshin and Design is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sangshin Electronics Co and Design Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Design 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 Design. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Design has no effect on the direction of Sangshin Electronics i.e., Sangshin Electronics and Design go up and down completely randomly.
Pair Corralation between Sangshin Electronics and Design
Assuming the 90 days trading horizon Sangshin Electronics Co is expected to under-perform the Design. But the stock apears to be less risky and, when comparing its historical volatility, Sangshin Electronics Co is 2.93 times less risky than Design. The stock trades about -0.05 of its potential returns per unit of risk. The Design Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 375,500 in Design Co on September 12, 2024 and sell it today you would lose (298,200) from holding Design Co or give up 79.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.53% |
| Values | Daily Returns |
Sangshin Electronics Co vs. Design Co
Performance |
| Timeline |
| Sangshin Electronics |
| Design |
Sangshin Electronics and Design Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangshin Electronics and Design
The main advantage of trading using opposite Sangshin Electronics and Design positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangshin Electronics position performs unexpectedly, Design 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 Design will offset losses from the drop in Design's long position.| Sangshin Electronics vs. Daejoo Electronic Materials | Sangshin Electronics vs. Interflex Co | Sangshin Electronics vs. Solution Advanced Technology | Sangshin Electronics vs. Busan Industrial Co |
| Design vs. Woori Technology Investment | Design vs. SV Investment | Design vs. DB Insurance Co | Design vs. LG Display 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |