Correlation Between SS TECH and Shinsung Delta

Can any of the company-specific risk be diversified away by investing in both SS TECH and Shinsung Delta 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 SS TECH and Shinsung Delta into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SS TECH and Shinsung Delta Tech, you can compare the effects of market volatilities on SS TECH and Shinsung Delta 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 SS TECH with a short position of Shinsung Delta. Check out your portfolio center. Please also check ongoing floating volatility patterns of SS TECH and Shinsung Delta.

Diversification Opportunities for SS TECH and Shinsung Delta

0.08

Correlation Coefficient

SS TECH  Shinsung Delta

Significant diversification

The 3 months correlation between 101490 and Shinsung is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding SS TECH and Shinsung Delta Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsung Delta Tech and SS TECH 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 SS TECH are associated (or correlated) with Shinsung Delta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsung Delta Tech has no effect on the direction of SS TECH i.e., SS TECH and Shinsung Delta go up and down completely randomly.

Pair Corralation between SS TECH and Shinsung Delta

Assuming the 90 days trading horizon SS TECH is expected to generate 11.33 times less return on investment than Shinsung Delta. But when comparing it to its historical volatility, SS TECH is 1.52 times less risky than Shinsung Delta. It trades about 0.03 of its potential returns per unit of risk. Shinsung Delta Tech is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  4,360,000  in Shinsung Delta Tech on September 11, 2024 and sell it today you would earn a total of  3,600,000  from holding Shinsung Delta Tech or generate 82.57% return on investment over 90 days.

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

SS TECH  vs.  Shinsung Delta Tech

SS TECH

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SS TECH are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SS TECH may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Shinsung Delta Tech

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Shinsung Delta Tech are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shinsung Delta sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SS TECH and Shinsung Delta

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

The idea behind SS TECH and Shinsung Delta Tech 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.