Correlation Between Sung Bo and FNSTech
Can any of the company-specific risk be diversified away by investing in both Sung Bo and FNSTech 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 FNSTech 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 FNSTech Co, you can compare the effects of market volatilities on Sung Bo and FNSTech 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 FNSTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sung Bo and FNSTech.
Diversification Opportunities for Sung Bo and FNSTech
Very weak diversification
The 3 months correlation between Sung and FNSTech is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Sung Bo Chemicals and FNSTech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNSTech 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 FNSTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNSTech has no effect on the direction of Sung Bo i.e., Sung Bo and FNSTech go up and down completely randomly.
Pair Corralation between Sung Bo and FNSTech
Assuming the 90 days trading horizon Sung Bo is expected to generate 518.75 times less return on investment than FNSTech. But when comparing it to its historical volatility, Sung Bo Chemicals is 5.07 times less risky than FNSTech. It trades about 0.0 of its potential returns per unit of risk. FNSTech Co is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 795,000 in FNSTech Co on October 28, 2024 and sell it today you would earn a total of 293,000 from holding FNSTech Co or generate 36.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sung Bo Chemicals vs. FNSTech Co
Performance |
| Timeline |
| Sung Bo Chemicals |
| FNSTech |
Sung Bo and FNSTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sung Bo and FNSTech
The main advantage of trading using opposite Sung Bo and FNSTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sung Bo position performs unexpectedly, FNSTech 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 FNSTech will offset losses from the drop in FNSTech's long position.| Sung Bo vs. NewFlex Technology Co | Sung Bo vs. RFTech Co | Sung Bo vs. Puloon Technology | Sung Bo vs. Bosung Power Technology |
| FNSTech vs. Samsung Electronics Co | FNSTech vs. Samsung Electronics Co | FNSTech vs. LG Energy Solution | FNSTech vs. SK Hynix |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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