Correlation Between Sangsin Energy and Digital Imaging

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

Diversification Opportunities for Sangsin Energy and Digital Imaging

0.5
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Sangsin and Digital is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Sangsin Energy Display and Digital Imaging Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Imaging Tech 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 Digital Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Imaging Tech has no effect on the direction of Sangsin Energy i.e., Sangsin Energy and Digital Imaging go up and down completely randomly.

Pair Corralation between Sangsin Energy and Digital Imaging

Assuming the 90 days trading horizon Sangsin Energy Display is expected to under-perform the Digital Imaging. But the stock apears to be less risky and, when comparing its historical volatility, Sangsin Energy Display is 2.02 times less risky than Digital Imaging. The stock trades about -0.08 of its potential returns per unit of risk. The Digital Imaging Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  967,494  in Digital Imaging Technology on October 22, 2024 and sell it today you would earn a total of  693,506  from holding Digital Imaging Technology or generate 71.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Sangsin Energy Display  vs.  Digital Imaging Technology

 Performance 
       Timeline  
Sangsin Energy Display 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
Digital Imaging Tech 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Digital Imaging Technology are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Digital Imaging sustained solid returns over the last few months and may actually be approaching a breakup point.

Sangsin Energy and Digital Imaging Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sangsin Energy and Digital Imaging

The main advantage of trading using opposite Sangsin Energy and Digital Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangsin Energy position performs unexpectedly, Digital Imaging 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 Digital Imaging will offset losses from the drop in Digital Imaging's long position.
The idea behind Sangsin Energy Display and Digital Imaging Technology 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.
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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