Correlation Between Sung Bo and Bohae Brewery
Can any of the company-specific risk be diversified away by investing in both Sung Bo and Bohae Brewery 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 Sung Bo and Bohae Brewery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sung Bo Chemicals and Bohae Brewery, you can compare the effects of market volatilities on Sung Bo and Bohae Brewery 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 Sung Bo with a short position of Bohae Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sung Bo and Bohae Brewery.
Diversification Opportunities for Sung Bo and Bohae Brewery
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sung and Bohae is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sung Bo Chemicals and Bohae Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bohae Brewery and Sung Bo 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 Sung Bo Chemicals are associated (or correlated) with Bohae Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bohae Brewery has no effect on the direction of Sung Bo i.e., Sung Bo and Bohae Brewery go up and down completely randomly.
Pair Corralation between Sung Bo and Bohae Brewery
Assuming the 90 days trading horizon Sung Bo Chemicals is expected to under-perform the Bohae Brewery. But the stock apears to be less risky and, when comparing its historical volatility, Sung Bo Chemicals is 11.6 times less risky than Bohae Brewery. The stock trades about -0.31 of its potential returns per unit of risk. The Bohae Brewery is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 42,100 in Bohae Brewery on August 24, 2024 and sell it today you would earn a total of 10,900 from holding Bohae Brewery or generate 25.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sung Bo Chemicals vs. Bohae Brewery
Performance |
| Timeline |
| Sung Bo Chemicals |
| Bohae Brewery |
Sung Bo and Bohae Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sung Bo and Bohae Brewery
The main advantage of trading using opposite Sung Bo and Bohae Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sung Bo position performs unexpectedly, Bohae Brewery 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 Bohae Brewery will offset losses from the drop in Bohae Brewery's long position.| Sung Bo vs. AptaBio Therapeutics | Sung Bo vs. Daewoo SBI SPAC | Sung Bo vs. Dream Security co | Sung Bo vs. Microfriend |
| Bohae Brewery vs. AptaBio Therapeutics | Bohae Brewery vs. Daewoo SBI SPAC | Bohae Brewery vs. Dream Security co | Bohae Brewery vs. Microfriend |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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