Correlation Between Coxon Precise and Song Ho
Can any of the company-specific risk be diversified away by investing in both Coxon Precise and Song Ho 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 Coxon Precise and Song Ho into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coxon Precise Industrial and Song Ho Industrial, you can compare the effects of market volatilities on Coxon Precise and Song Ho 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 Coxon Precise with a short position of Song Ho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coxon Precise and Song Ho.
Diversification Opportunities for Coxon Precise and Song Ho
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Coxon and Song is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Coxon Precise Industrial and Song Ho Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Song Ho Industrial and Coxon Precise 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 Coxon Precise Industrial are associated (or correlated) with Song Ho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Song Ho Industrial has no effect on the direction of Coxon Precise i.e., Coxon Precise and Song Ho go up and down completely randomly.
Pair Corralation between Coxon Precise and Song Ho
Assuming the 90 days trading horizon Coxon Precise Industrial is expected to under-perform the Song Ho. In addition to that, Coxon Precise is 5.42 times more volatile than Song Ho Industrial. It trades about -0.2 of its total potential returns per unit of risk. Song Ho Industrial is currently generating about 0.13 per unit of volatility. If you would invest 2,740 in Song Ho Industrial on September 1, 2024 and sell it today you would earn a total of 40.00 from holding Song Ho Industrial or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coxon Precise Industrial vs. Song Ho Industrial
Performance |
| Timeline |
| Coxon Precise Industrial |
| Song Ho Industrial |
Coxon Precise and Song Ho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coxon Precise and Song Ho
The main advantage of trading using opposite Coxon Precise and Song Ho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coxon Precise position performs unexpectedly, Song Ho 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 Song Ho will offset losses from the drop in Song Ho's long position.The idea behind Coxon Precise Industrial and Song Ho Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Song Ho vs. Synmosa Biopharma | Song Ho vs. Taiwan Glass Ind | Song Ho vs. Tong Tai Machine Tool | Song Ho vs. Oriental Union Chemical |
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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