Correlation Between Sangshin Electronics and VAIV
Can any of the company-specific risk be diversified away by investing in both Sangshin Electronics and VAIV 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 VAIV 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 VAIV Co, you can compare the effects of market volatilities on Sangshin Electronics and VAIV 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 VAIV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangshin Electronics and VAIV.
Diversification Opportunities for Sangshin Electronics and VAIV
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sangshin and VAIV is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Sangshin Electronics Co and VAIV Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VAIV 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 VAIV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VAIV has no effect on the direction of Sangshin Electronics i.e., Sangshin Electronics and VAIV go up and down completely randomly.
Pair Corralation between Sangshin Electronics and VAIV
Assuming the 90 days trading horizon Sangshin Electronics Co is expected to generate 0.72 times more return on investment than VAIV. However, Sangshin Electronics Co is 1.39 times less risky than VAIV. It trades about -0.04 of its potential returns per unit of risk. VAIV Co is currently generating about -0.05 per unit of risk. If you would invest 378,000 in Sangshin Electronics Co on September 12, 2024 and sell it today you would lose (113,500) from holding Sangshin Electronics Co or give up 30.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sangshin Electronics Co vs. VAIV Co
Performance |
| Timeline |
| Sangshin Electronics |
| VAIV |
Sangshin Electronics and VAIV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangshin Electronics and VAIV
The main advantage of trading using opposite Sangshin Electronics and VAIV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangshin Electronics position performs unexpectedly, VAIV 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 VAIV will offset losses from the drop in VAIV'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 |
| VAIV vs. SKONEC Entertainment Co | VAIV vs. Inzi Display CoLtd | VAIV vs. Tamul Multimedia Co | VAIV vs. Alton Sports CoLtd |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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