Correlation Between Daishin Balance and SGA Solutions
Can any of the company-specific risk be diversified away by investing in both Daishin Balance and SGA Solutions 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 Daishin Balance and SGA Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daishin Balance No8 and SGA Solutions CoLtd, you can compare the effects of market volatilities on Daishin Balance and SGA Solutions 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 Daishin Balance with a short position of SGA Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Balance and SGA Solutions.
Diversification Opportunities for Daishin Balance and SGA Solutions
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daishin and SGA is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Balance No8 and SGA Solutions CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGA Solutions CoLtd and Daishin Balance 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 Daishin Balance No8 are associated (or correlated) with SGA Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGA Solutions CoLtd has no effect on the direction of Daishin Balance i.e., Daishin Balance and SGA Solutions go up and down completely randomly.
Pair Corralation between Daishin Balance and SGA Solutions
Assuming the 90 days trading horizon Daishin Balance No8 is expected to generate 1.53 times more return on investment than SGA Solutions. However, Daishin Balance is 1.53 times more volatile than SGA Solutions CoLtd. It trades about 0.13 of its potential returns per unit of risk. SGA Solutions CoLtd is currently generating about 0.03 per unit of risk. If you would invest 484,500 in Daishin Balance No8 on October 16, 2024 and sell it today you would earn a total of 99,500 from holding Daishin Balance No8 or generate 20.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daishin Balance No8 vs. SGA Solutions CoLtd
Performance |
| Timeline |
| Daishin Balance No8 |
| SGA Solutions CoLtd |
Daishin Balance and SGA Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daishin Balance and SGA Solutions
The main advantage of trading using opposite Daishin Balance and SGA Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Balance position performs unexpectedly, SGA Solutions 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 SGA Solutions will offset losses from the drop in SGA Solutions' long position.| Daishin Balance vs. Daewoo Engineering Construction | Daishin Balance vs. SK Telecom Co | Daishin Balance vs. Keyang Electric Machinery | Daishin Balance vs. Korea Information Communications |
| SGA Solutions vs. KMH Hitech Co | SGA Solutions vs. GemVaxKAEL CoLtd | SGA Solutions vs. Bosung Power Technology | SGA Solutions vs. Busan Industrial 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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