Correlation Between Songwon Industrial and FOODWELL
Can any of the company-specific risk be diversified away by investing in both Songwon Industrial and FOODWELL 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 Songwon Industrial and FOODWELL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Songwon Industrial Co and FOODWELL Co, you can compare the effects of market volatilities on Songwon Industrial and FOODWELL 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 Songwon Industrial with a short position of FOODWELL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Songwon Industrial and FOODWELL.
Diversification Opportunities for Songwon Industrial and FOODWELL
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Songwon and FOODWELL is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Songwon Industrial Co and FOODWELL Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOODWELL and Songwon Industrial 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 Songwon Industrial Co are associated (or correlated) with FOODWELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOODWELL has no effect on the direction of Songwon Industrial i.e., Songwon Industrial and FOODWELL go up and down completely randomly.
Pair Corralation between Songwon Industrial and FOODWELL
Assuming the 90 days trading horizon Songwon Industrial Co is expected to generate 2.28 times more return on investment than FOODWELL. However, Songwon Industrial is 2.28 times more volatile than FOODWELL Co. It trades about 0.2 of its potential returns per unit of risk. FOODWELL Co is currently generating about 0.09 per unit of risk. If you would invest 1,086,000 in Songwon Industrial Co on October 12, 2024 and sell it today you would earn a total of 109,000 from holding Songwon Industrial Co or generate 10.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Songwon Industrial Co vs. FOODWELL Co
Performance |
| Timeline |
| Songwon Industrial |
| FOODWELL |
Songwon Industrial and FOODWELL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Songwon Industrial and FOODWELL
The main advantage of trading using opposite Songwon Industrial and FOODWELL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Songwon Industrial position performs unexpectedly, FOODWELL 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 FOODWELL will offset losses from the drop in FOODWELL's long position.| Songwon Industrial vs. CU Tech Corp | Songwon Industrial vs. Narae Nanotech Corp | Songwon Industrial vs. Vitzro Tech Co | Songwon Industrial vs. Raontech |
| FOODWELL vs. Songwon Industrial Co | FOODWELL vs. Cheryong Industrial CoLtd | FOODWELL vs. Industrial Bank | FOODWELL vs. Seoyon Topmetal 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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