Correlation Between Sangsin Energy and Coloray International

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

Diversification Opportunities for Sangsin Energy and Coloray International

0.4

Correlation Coefficient

Sangsin Energy  Coloray International

Very weak diversification

The 3 months correlation between Sangsin and Coloray is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Sangsin Energy Display and Coloray International Investme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coloray International 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 Coloray International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coloray International has no effect on the direction of Sangsin Energy i.e., Sangsin Energy and Coloray International go up and down completely randomly.

Pair Corralation between Sangsin Energy and Coloray International

Assuming the 90 days trading horizon Sangsin Energy is expected to generate 3.6 times less return on investment than Coloray International. But when comparing it to its historical volatility, Sangsin Energy Display is 1.0 times less risky than Coloray International. It trades about 0.06 of its potential returns per unit of risk. Coloray International Investment is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  58,500  in Coloray International Investment on December 24, 2024 and sell it today you would earn a total of  26,000  from holding Coloray International Investment or generate 44.44% return on investment over 90 days.

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

Sangsin Energy Display  vs.  Coloray International Investme

Sangsin Energy Display

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sangsin Energy Display are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sangsin Energy may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Coloray International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Coloray International Investment are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Coloray International sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sangsin Energy and Coloray International

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

The idea behind Sangsin Energy Display and Coloray International Investment 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.