Correlation Between Sangsin Energy and InfoBank

Can any of the company-specific risk be diversified away by investing in both Sangsin Energy and InfoBank 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 InfoBank 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 InfoBank, you can compare the effects of market volatilities on Sangsin Energy and InfoBank 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 InfoBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangsin Energy and InfoBank.

Diversification Opportunities for Sangsin Energy and InfoBank

-0.03

Correlation Coefficient

Sangsin Energy  InfoBank

Good diversification

The 3 months correlation between Sangsin and InfoBank is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sangsin Energy Display and InfoBank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InfoBank 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 InfoBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InfoBank has no effect on the direction of Sangsin Energy i.e., Sangsin Energy and InfoBank go up and down completely randomly.

Pair Corralation between Sangsin Energy and InfoBank

Assuming the 90 days trading horizon Sangsin Energy Display is expected to under-perform the InfoBank. But the stock apears to be less risky and, when comparing its historical volatility, Sangsin Energy Display is 1.43 times less risky than InfoBank. The stock trades about -0.24 of its potential returns per unit of risk. The InfoBank is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  639,000  in InfoBank on September 12, 2024 and sell it today you would lose (21,000) from holding InfoBank or give up 3.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Sangsin Energy Display  vs.  InfoBank

Sangsin Energy Display

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sangsin Energy Display has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

InfoBank

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days InfoBank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, InfoBank is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sangsin Energy and InfoBank

The main advantage of trading using opposite Sangsin Energy and InfoBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangsin Energy position performs unexpectedly, InfoBank 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 InfoBank will offset losses from the drop in InfoBank's long position.

The idea behind Sangsin Energy Display and InfoBank 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.