Correlation Between Sunny Electronics and Korea Alcohol
Can any of the company-specific risk be diversified away by investing in both Sunny Electronics and Korea Alcohol 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 Sunny Electronics and Korea Alcohol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunny Electronics Corp and Korea Alcohol Industrial, you can compare the effects of market volatilities on Sunny Electronics and Korea Alcohol 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 Sunny Electronics with a short position of Korea Alcohol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Electronics and Korea Alcohol.
Diversification Opportunities for Sunny Electronics and Korea Alcohol
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sunny and Korea is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Electronics Corp and Korea Alcohol Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Alcohol Industrial and Sunny Electronics 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 Sunny Electronics Corp are associated (or correlated) with Korea Alcohol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Alcohol Industrial has no effect on the direction of Sunny Electronics i.e., Sunny Electronics and Korea Alcohol go up and down completely randomly.
Pair Corralation between Sunny Electronics and Korea Alcohol
Assuming the 90 days trading horizon Sunny Electronics Corp is expected to generate 1.44 times more return on investment than Korea Alcohol. However, Sunny Electronics is 1.44 times more volatile than Korea Alcohol Industrial. It trades about 0.07 of its potential returns per unit of risk. Korea Alcohol Industrial is currently generating about -0.13 per unit of risk. If you would invest 159,500 in Sunny Electronics Corp on August 29, 2024 and sell it today you would earn a total of 3,900 from holding Sunny Electronics Corp or generate 2.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Electronics Corp vs. Korea Alcohol Industrial
Performance |
| Timeline |
| Sunny Electronics Corp |
| Korea Alcohol Industrial |
Sunny Electronics and Korea Alcohol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Electronics and Korea Alcohol
The main advantage of trading using opposite Sunny Electronics and Korea Alcohol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Electronics position performs unexpectedly, Korea Alcohol 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 Korea Alcohol will offset losses from the drop in Korea Alcohol's long position.| Sunny Electronics vs. AptaBio Therapeutics | Sunny Electronics vs. Daewoo SBI SPAC | Sunny Electronics vs. Dream Security co | Sunny Electronics vs. Microfriend |
| Korea Alcohol vs. Sungchang Autotech Co | Korea Alcohol vs. RFTech Co | Korea Alcohol vs. INFINITT Healthcare Co | Korea Alcohol vs. POSCO M TECH 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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