Correlation Between Sangsin Energy and APro

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

Diversification Opportunities for Sangsin Energy and APro

0.55

Correlation Coefficient

Sangsin Energy  APro

Very weak diversification

The 3 months correlation between Sangsin and APro is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sangsin Energy Display and APro Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APro 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 APro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APro has no effect on the direction of Sangsin Energy i.e., Sangsin Energy and APro go up and down completely randomly.

Pair Corralation between Sangsin Energy and APro

Assuming the 90 days trading horizon Sangsin Energy Display is expected to generate 1.3 times more return on investment than APro. However, Sangsin Energy is 1.3 times more volatile than APro Co. It trades about 0.06 of its potential returns per unit of risk. APro Co is currently generating about -0.03 per unit of risk. If you would invest  740,952  in Sangsin Energy Display on December 1, 2024 and sell it today you would earn a total of  75,048  from holding Sangsin Energy Display or generate 10.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.31%
Values	Daily Returns

Sangsin Energy Display  vs.  APro Co

Sangsin Energy Display

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sangsin Energy Display are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sangsin Energy sustained solid returns over the last few months and may actually be approaching a breakup point.

APro

Risk-Adjusted Performance

Very Weak

Over the last 90 days APro Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, APro 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 APro

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

The idea behind Sangsin Energy Display and APro Co 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.