Correlation Between SK Square and Sangsin Energy
Can any of the company-specific risk be diversified away by investing in both SK Square and Sangsin Energy 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 SK Square and Sangsin Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Square Co and Sangsin Energy Display, you can compare the effects of market volatilities on SK Square and Sangsin Energy 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 SK Square with a short position of Sangsin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Square and Sangsin Energy.
Diversification Opportunities for SK Square and Sangsin Energy
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between 402340 and Sangsin is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding SK Square Co and Sangsin Energy Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsin Energy Display and SK Square 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 SK Square Co are associated (or correlated) with Sangsin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsin Energy Display has no effect on the direction of SK Square i.e., SK Square and Sangsin Energy go up and down completely randomly.
Pair Corralation between SK Square and Sangsin Energy
Assuming the 90 days trading horizon SK Square Co is expected to generate 1.05 times more return on investment than Sangsin Energy. However, SK Square is 1.05 times more volatile than Sangsin Energy Display. It trades about 0.07 of its potential returns per unit of risk. Sangsin Energy Display is currently generating about -0.06 per unit of risk. If you would invest 3,825,000 in SK Square Co on November 30, 2024 and sell it today you would earn a total of 5,185,000 from holding SK Square Co or generate 135.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Square Co vs. Sangsin Energy Display
Performance |
| Timeline |
| SK Square |
| Sangsin Energy Display |
SK Square and Sangsin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Square and Sangsin Energy
The main advantage of trading using opposite SK Square and Sangsin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Square position performs unexpectedly, Sangsin Energy 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 Sangsin Energy will offset losses from the drop in Sangsin Energy's long position.| SK Square vs. Hyosung Advanced Materials | SK Square vs. Formetal Co | SK Square vs. Kolon Plastics | SK Square vs. Heungkuk Metaltech CoLtd |
| Sangsin Energy vs. Bohae Brewery | Sangsin Energy vs. Aju IB Investment | Sangsin Energy vs. Pureun Mutual Savings | Sangsin Energy vs. KTB Investment Securities |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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