Correlation Between Song Ho and Iron Force
Can any of the company-specific risk be diversified away by investing in both Song Ho and Iron Force 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 Song Ho and Iron Force into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Song Ho Industrial and Iron Force Industrial, you can compare the effects of market volatilities on Song Ho and Iron Force 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 Song Ho with a short position of Iron Force. Check out your portfolio center. Please also check ongoing floating volatility patterns of Song Ho and Iron Force.
Diversification Opportunities for Song Ho and Iron Force
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Song and Iron is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Song Ho Industrial and Iron Force Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iron Force Industrial and Song Ho 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 Song Ho Industrial are associated (or correlated) with Iron Force. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iron Force Industrial has no effect on the direction of Song Ho i.e., Song Ho and Iron Force go up and down completely randomly.
Pair Corralation between Song Ho and Iron Force
Assuming the 90 days trading horizon Song Ho Industrial is expected to generate 0.36 times more return on investment than Iron Force. However, Song Ho Industrial is 2.8 times less risky than Iron Force. It trades about 0.12 of its potential returns per unit of risk. Iron Force Industrial is currently generating about 0.01 per unit of risk. If you would invest 2,765 in Song Ho Industrial on November 30, 2024 and sell it today you would earn a total of 55.00 from holding Song Ho Industrial or generate 1.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Song Ho Industrial vs. Iron Force Industrial
Performance |
| Timeline |
| Song Ho Industrial |
| Iron Force Industrial |
Song Ho and Iron Force Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Song Ho and Iron Force
The main advantage of trading using opposite Song Ho and Iron Force positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Song Ho position performs unexpectedly, Iron Force 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 Iron Force will offset losses from the drop in Iron Force's long position.| Song Ho vs. LandMark Optoelectronics | Song Ho vs. Elan Microelectronics Corp | Song Ho vs. Orient Semiconductor Electronics | Song Ho vs. WIN Semiconductors |
| Iron Force vs. Hota Industrial Mfg | Iron Force vs. Cub Elecparts | Iron Force vs. Yulon Nissan Motor | Iron Force vs. Tong Yang Industry |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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