Correlation Between Sangsin Energy and Doosan Heavy
Can any of the company-specific risk be diversified away by investing in both Sangsin Energy and Doosan Heavy 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 Sangsin Energy and Doosan Heavy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sangsin Energy Display and Doosan Heavy Ind, you can compare the effects of market volatilities on Sangsin Energy and Doosan Heavy 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 Sangsin Energy with a short position of Doosan Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangsin Energy and Doosan Heavy.
Diversification Opportunities for Sangsin Energy and Doosan Heavy
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sangsin and Doosan is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sangsin Energy Display and Doosan Heavy Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doosan Heavy Ind and Sangsin Energy 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 Sangsin Energy Display are associated (or correlated) with Doosan Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doosan Heavy Ind has no effect on the direction of Sangsin Energy i.e., Sangsin Energy and Doosan Heavy go up and down completely randomly.
Pair Corralation between Sangsin Energy and Doosan Heavy
Assuming the 90 days trading horizon Sangsin Energy Display is expected to generate 1.37 times more return on investment than Doosan Heavy. However, Sangsin Energy is 1.37 times more volatile than Doosan Heavy Ind. It trades about 0.28 of its potential returns per unit of risk. Doosan Heavy Ind is currently generating about 0.26 per unit of risk. If you would invest 694,704 in Sangsin Energy Display on October 11, 2024 and sell it today you would earn a total of 107,296 from holding Sangsin Energy Display or generate 15.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sangsin Energy Display vs. Doosan Heavy Ind
Performance |
Timeline |
Sangsin Energy Display |
Doosan Heavy Ind |
Sangsin Energy and Doosan Heavy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sangsin Energy and Doosan Heavy
The main advantage of trading using opposite Sangsin Energy and Doosan Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangsin Energy position performs unexpectedly, Doosan Heavy 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 Doosan Heavy will offset losses from the drop in Doosan Heavy's long position.Sangsin Energy vs. KTB Investment Securities | Sangsin Energy vs. Daehan Steel | Sangsin Energy vs. DSC Investment | Sangsin Energy vs. Seah Steel Corp |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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