Correlation Between Sung Bo and Incar Financial
Can any of the company-specific risk be diversified away by investing in both Sung Bo and Incar Financial 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 Incar Financial 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 Incar Financial Service, you can compare the effects of market volatilities on Sung Bo and Incar Financial 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 Incar Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sung Bo and Incar Financial.
Diversification Opportunities for Sung Bo and Incar Financial
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sung and Incar is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Sung Bo Chemicals and Incar Financial Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Incar Financial Service 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 Incar Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Incar Financial Service has no effect on the direction of Sung Bo i.e., Sung Bo and Incar Financial go up and down completely randomly.
Pair Corralation between Sung Bo and Incar Financial
Assuming the 90 days trading horizon Sung Bo Chemicals is expected to under-perform the Incar Financial. But the stock apears to be less risky and, when comparing its historical volatility, Sung Bo Chemicals is 2.04 times less risky than Incar Financial. The stock trades about -0.01 of its potential returns per unit of risk. The Incar Financial Service is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 127,518 in Incar Financial Service on October 16, 2024 and sell it today you would earn a total of 413,482 from holding Incar Financial Service or generate 324.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.93% |
| Values | Daily Returns |
Sung Bo Chemicals vs. Incar Financial Service
Performance |
| Timeline |
| Sung Bo Chemicals |
| Incar Financial Service |
Sung Bo and Incar Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sung Bo and Incar Financial
The main advantage of trading using opposite Sung Bo and Incar Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sung Bo position performs unexpectedly, Incar Financial 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 Incar Financial will offset losses from the drop in Incar Financial's long position.| Sung Bo vs. Hankook Steel Co | Sung Bo vs. Golden Bridge Investment | Sung Bo vs. Daelim Trading Co | Sung Bo vs. Woori Technology Investment |
| Incar Financial vs. Sung Bo Chemicals | Incar Financial vs. Seers Technology | Incar Financial vs. HB Technology TD | Incar Financial vs. Bosung Power Technology |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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