Correlation Between Sung Bo and Namyang Dairy
Can any of the company-specific risk be diversified away by investing in both Sung Bo and Namyang Dairy 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 Namyang Dairy 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 Namyang Dairy, you can compare the effects of market volatilities on Sung Bo and Namyang Dairy 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 Namyang Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sung Bo and Namyang Dairy.
Diversification Opportunities for Sung Bo and Namyang Dairy
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sung and Namyang is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sung Bo Chemicals and Namyang Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namyang Dairy 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 Namyang Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namyang Dairy has no effect on the direction of Sung Bo i.e., Sung Bo and Namyang Dairy go up and down completely randomly.
Pair Corralation between Sung Bo and Namyang Dairy
Assuming the 90 days trading horizon Sung Bo is expected to generate 317.36 times less return on investment than Namyang Dairy. But when comparing it to its historical volatility, Sung Bo Chemicals is 175.11 times less risky than Namyang Dairy. It trades about 0.07 of its potential returns per unit of risk. Namyang Dairy is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 6,750,000 in Namyang Dairy on September 30, 2024 and sell it today you would lose (900,000) from holding Namyang Dairy or give up 13.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Sung Bo Chemicals vs. Namyang Dairy
Performance |
| Timeline |
| Sung Bo Chemicals |
| Namyang Dairy |
Sung Bo and Namyang Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sung Bo and Namyang Dairy
The main advantage of trading using opposite Sung Bo and Namyang Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sung Bo position performs unexpectedly, Namyang Dairy 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 Namyang Dairy will offset losses from the drop in Namyang Dairy's long position.| Sung Bo vs. AptaBio Therapeutics | Sung Bo vs. Wonbang Tech Co | Sung Bo vs. Busan Industrial Co | Sung Bo vs. Busan Ind |
| Namyang Dairy vs. Woori Financial Group | Namyang Dairy vs. Jb Financial | Namyang Dairy vs. Nh Investment And | Namyang Dairy vs. Kumho Petro Chemical |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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