Correlation Between Sung Bo and KPX Green
Can any of the company-specific risk be diversified away by investing in both Sung Bo and KPX Green 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 KPX Green 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 KPX Green Chemical, you can compare the effects of market volatilities on Sung Bo and KPX Green 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 KPX Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sung Bo and KPX Green.
Diversification Opportunities for Sung Bo and KPX Green
Very poor diversification
The 3 months correlation between Sung and KPX is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Sung Bo Chemicals and KPX Green Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KPX Green Chemical 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 KPX Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KPX Green Chemical has no effect on the direction of Sung Bo i.e., Sung Bo and KPX Green go up and down completely randomly.
Pair Corralation between Sung Bo and KPX Green
Assuming the 90 days trading horizon Sung Bo is expected to generate 16.92 times less return on investment than KPX Green. But when comparing it to its historical volatility, Sung Bo Chemicals is 5.49 times less risky than KPX Green. It trades about 0.02 of its potential returns per unit of risk. KPX Green Chemical is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 623,587 in KPX Green Chemical on October 18, 2024 and sell it today you would earn a total of 110,413 from holding KPX Green Chemical or generate 17.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sung Bo Chemicals vs. KPX Green Chemical
Performance |
| Timeline |
| Sung Bo Chemicals |
| KPX Green Chemical |
Sung Bo and KPX Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sung Bo and KPX Green
The main advantage of trading using opposite Sung Bo and KPX Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sung Bo position performs unexpectedly, KPX Green 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 KPX Green will offset losses from the drop in KPX Green's long position.| Sung Bo vs. Moonbae Steel | Sung Bo vs. Nature and Environment | Sung Bo vs. Hankukpackage Co | Sung Bo vs. Polaris Office Corp |
| KPX Green vs. Kyung In Synthetic Corp | KPX Green vs. Homecast CoLtd | KPX Green vs. Sung Bo Chemicals | KPX Green vs. iNtRON Biotechnology |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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