Correlation Between Hurum and SGA Solutions
Can any of the company-specific risk be diversified away by investing in both Hurum 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 Hurum and SGA Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurum Co and SGA Solutions CoLtd, you can compare the effects of market volatilities on Hurum 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 Hurum with a short position of SGA Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurum and SGA Solutions.
Diversification Opportunities for Hurum and SGA Solutions
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hurum and SGA is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hurum Co 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 Hurum 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 Hurum Co 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 Hurum i.e., Hurum and SGA Solutions go up and down completely randomly.
Pair Corralation between Hurum and SGA Solutions
Assuming the 90 days trading horizon Hurum Co is expected to generate 0.56 times more return on investment than SGA Solutions. However, Hurum Co is 1.8 times less risky than SGA Solutions. It trades about 0.28 of its potential returns per unit of risk. SGA Solutions CoLtd is currently generating about 0.13 per unit of risk. If you would invest 70,700 in Hurum Co on October 30, 2024 and sell it today you would earn a total of 5,100 from holding Hurum Co or generate 7.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hurum Co vs. SGA Solutions CoLtd
Performance |
| Timeline |
| Hurum |
| SGA Solutions CoLtd |
Hurum and SGA Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hurum and SGA Solutions
The main advantage of trading using opposite Hurum and SGA Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurum 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.| Hurum vs. SK Chemicals Co | Hurum vs. Camus Engineering Construction | Hurum vs. Sung Bo Chemicals | Hurum vs. Hanshin Construction Co |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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