Correlation Between Sung Bo and Hancom
Can any of the company-specific risk be diversified away by investing in both Sung Bo and Hancom 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 Hancom 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 Hancom Inc, you can compare the effects of market volatilities on Sung Bo and Hancom 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 Hancom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sung Bo and Hancom.
Diversification Opportunities for Sung Bo and Hancom
Pay attention - limited upside
The 3 months correlation between Sung and Hancom is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Sung Bo Chemicals and Hancom Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hancom Inc 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 Hancom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hancom Inc has no effect on the direction of Sung Bo i.e., Sung Bo and Hancom go up and down completely randomly.
Pair Corralation between Sung Bo and Hancom
Assuming the 90 days trading horizon Sung Bo Chemicals is expected to under-perform the Hancom. But the stock apears to be less risky and, when comparing its historical volatility, Sung Bo Chemicals is 9.36 times less risky than Hancom. The stock trades about -0.38 of its potential returns per unit of risk. The Hancom Inc is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,934,000 in Hancom Inc on September 4, 2024 and sell it today you would earn a total of 521,000 from holding Hancom Inc or generate 26.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sung Bo Chemicals vs. Hancom Inc
Performance |
| Timeline |
| Sung Bo Chemicals |
| Hancom Inc |
Sung Bo and Hancom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sung Bo and Hancom
The main advantage of trading using opposite Sung Bo and Hancom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sung Bo position performs unexpectedly, Hancom 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 Hancom will offset losses from the drop in Hancom's long position.| Sung Bo vs. Seoul Semiconductor Co | Sung Bo vs. Samyang Foods Co | Sung Bo vs. Daehan Steel | Sung Bo vs. Polaris Office Corp |
| Hancom vs. Kukdong Oil Chemicals | Hancom vs. Sung Bo Chemicals | Hancom vs. AeroSpace Technology of | Hancom vs. QUALITAS SEMICONDUCTOR LTD |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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