Correlation Between Coloray International and Samwha Electronics
Can any of the company-specific risk be diversified away by investing in both Coloray International and Samwha Electronics 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 Coloray International and Samwha Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coloray International Investment and Samwha Electronics Co, you can compare the effects of market volatilities on Coloray International and Samwha Electronics 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 Coloray International with a short position of Samwha Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coloray International and Samwha Electronics.
Diversification Opportunities for Coloray International and Samwha Electronics
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Coloray and Samwha is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Coloray International Investme and Samwha Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samwha Electronics and Coloray International 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 Coloray International Investment are associated (or correlated) with Samwha Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samwha Electronics has no effect on the direction of Coloray International i.e., Coloray International and Samwha Electronics go up and down completely randomly.
Pair Corralation between Coloray International and Samwha Electronics
Assuming the 90 days trading horizon Coloray International Investment is expected to generate 0.85 times more return on investment than Samwha Electronics. However, Coloray International Investment is 1.17 times less risky than Samwha Electronics. It trades about 0.44 of its potential returns per unit of risk. Samwha Electronics Co is currently generating about 0.23 per unit of risk. If you would invest 55,100 in Coloray International Investment on October 11, 2024 and sell it today you would earn a total of 10,900 from holding Coloray International Investment or generate 19.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Coloray International Investme vs. Samwha Electronics Co
Performance |
| Timeline |
| Coloray International |
| Samwha Electronics |
Coloray International and Samwha Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coloray International and Samwha Electronics
The main advantage of trading using opposite Coloray International and Samwha Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coloray International position performs unexpectedly, Samwha Electronics 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 Samwha Electronics will offset losses from the drop in Samwha Electronics' long position.| Coloray International vs. Next Entertainment World | Coloray International vs. Daejung Chemicals Metals | Coloray International vs. Jinro Distillers Co | Coloray International vs. Nasmedia Co |
| Samwha Electronics vs. Grand Korea Leisure | Samwha Electronics vs. Woori Financial Group | Samwha Electronics vs. Sangsin Energy Display | Samwha Electronics vs. PLAYWITH |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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