Correlation Between Sung Bo and Cuckoo Electronics
Can any of the company-specific risk be diversified away by investing in both Sung Bo and Cuckoo Electronics 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 Cuckoo Electronics 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 Cuckoo Electronics Co, you can compare the effects of market volatilities on Sung Bo and Cuckoo Electronics 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 Cuckoo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sung Bo and Cuckoo Electronics.
Diversification Opportunities for Sung Bo and Cuckoo Electronics
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sung and Cuckoo is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Sung Bo Chemicals and Cuckoo Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cuckoo Electronics 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 Cuckoo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cuckoo Electronics has no effect on the direction of Sung Bo i.e., Sung Bo and Cuckoo Electronics go up and down completely randomly.
Pair Corralation between Sung Bo and Cuckoo Electronics
Assuming the 90 days trading horizon Sung Bo Chemicals is expected to under-perform the Cuckoo Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Sung Bo Chemicals is 1.11 times less risky than Cuckoo Electronics. The stock trades about -0.02 of its potential returns per unit of risk. The Cuckoo Electronics Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,514,681 in Cuckoo Electronics Co on September 3, 2024 and sell it today you would earn a total of 795,319 from holding Cuckoo Electronics Co or generate 52.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sung Bo Chemicals vs. Cuckoo Electronics Co
Performance |
| Timeline |
| Sung Bo Chemicals |
| Cuckoo Electronics |
Sung Bo and Cuckoo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sung Bo and Cuckoo Electronics
The main advantage of trading using opposite Sung Bo and Cuckoo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sung Bo position performs unexpectedly, Cuckoo Electronics 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 Cuckoo Electronics will offset losses from the drop in Cuckoo Electronics' long position.| Sung Bo vs. Global Standard Technology | Sung Bo vs. Samsung Life Insurance | Sung Bo vs. Kakao Games Corp | Sung Bo vs. Dong A Steel Technology |
| Cuckoo Electronics vs. CG Hi Tech | Cuckoo Electronics vs. Digital Power Communications | Cuckoo Electronics vs. Lotte Data Communication | Cuckoo Electronics vs. Innowireless Co |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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