Correlation Between Sung Bo and Guyoung Technology
Can any of the company-specific risk be diversified away by investing in both Sung Bo and Guyoung Technology 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 Guyoung Technology 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 Guyoung Technology Co, you can compare the effects of market volatilities on Sung Bo and Guyoung Technology 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 Guyoung Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sung Bo and Guyoung Technology.
Diversification Opportunities for Sung Bo and Guyoung Technology
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sung and Guyoung is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sung Bo Chemicals and Guyoung Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guyoung Technology 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 Guyoung Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guyoung Technology has no effect on the direction of Sung Bo i.e., Sung Bo and Guyoung Technology go up and down completely randomly.
Pair Corralation between Sung Bo and Guyoung Technology
Assuming the 90 days trading horizon Sung Bo is expected to generate 6.95 times less return on investment than Guyoung Technology. But when comparing it to its historical volatility, Sung Bo Chemicals is 3.43 times less risky than Guyoung Technology. It trades about 0.15 of its potential returns per unit of risk. Guyoung Technology Co is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 198,100 in Guyoung Technology Co on October 29, 2024 and sell it today you would earn a total of 28,900 from holding Guyoung Technology Co or generate 14.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sung Bo Chemicals vs. Guyoung Technology Co
Performance |
| Timeline |
| Sung Bo Chemicals |
| Guyoung Technology |
Sung Bo and Guyoung Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sung Bo and Guyoung Technology
The main advantage of trading using opposite Sung Bo and Guyoung Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sung Bo position performs unexpectedly, Guyoung Technology 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 Guyoung Technology will offset losses from the drop in Guyoung Technology's long position.| Sung Bo vs. KB Financial Group | Sung Bo vs. Shinhan Financial Group | Sung Bo vs. Hana Financial | Sung Bo vs. Woori Financial Group |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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