Correlation Between Sung Bo and Eugene Investment
Can any of the company-specific risk be diversified away by investing in both Sung Bo and Eugene Investment 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 Eugene Investment 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 Eugene Investment Securities, you can compare the effects of market volatilities on Sung Bo and Eugene Investment 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 Eugene Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sung Bo and Eugene Investment.
Diversification Opportunities for Sung Bo and Eugene Investment
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sung and Eugene is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Sung Bo Chemicals and Eugene Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eugene Investment 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 Eugene Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eugene Investment has no effect on the direction of Sung Bo i.e., Sung Bo and Eugene Investment go up and down completely randomly.
Pair Corralation between Sung Bo and Eugene Investment
Assuming the 90 days trading horizon Sung Bo Chemicals is expected to generate 0.48 times more return on investment than Eugene Investment. However, Sung Bo Chemicals is 2.1 times less risky than Eugene Investment. It trades about -0.01 of its potential returns per unit of risk. Eugene Investment Securities is currently generating about -0.04 per unit of risk. If you would invest 272,344 in Sung Bo Chemicals on September 1, 2024 and sell it today you would lose (20,844) from holding Sung Bo Chemicals or give up 7.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sung Bo Chemicals vs. Eugene Investment Securities
Performance |
| Timeline |
| Sung Bo Chemicals |
| Eugene Investment |
Sung Bo and Eugene Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sung Bo and Eugene Investment
The main advantage of trading using opposite Sung Bo and Eugene Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sung Bo position performs unexpectedly, Eugene Investment 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 Eugene Investment will offset losses from the drop in Eugene Investment's long position.| Sung Bo vs. AptaBio Therapeutics | Sung Bo vs. Daewoo SBI SPAC | Sung Bo vs. Dream Security co | Sung Bo vs. Microfriend |
| Eugene Investment vs. AptaBio Therapeutics | Eugene Investment vs. Daewoo SBI SPAC | Eugene Investment vs. Dream Security co | Eugene Investment 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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