Correlation Between Sunny Electronics and Naver
Can any of the company-specific risk be diversified away by investing in both Sunny Electronics and Naver 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 Naver 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 Naver, you can compare the effects of market volatilities on Sunny Electronics and Naver 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 Naver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Electronics and Naver.
Diversification Opportunities for Sunny Electronics and Naver
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sunny and Naver is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Electronics Corp and Naver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naver 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 Naver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naver has no effect on the direction of Sunny Electronics i.e., Sunny Electronics and Naver go up and down completely randomly.
Pair Corralation between Sunny Electronics and Naver
Assuming the 90 days trading horizon Sunny Electronics is expected to generate 12.92 times less return on investment than Naver. In addition to that, Sunny Electronics is 1.3 times more volatile than Naver. It trades about 0.03 of its total potential returns per unit of risk. Naver is currently generating about 0.51 per unit of volatility. If you would invest 17,570,000 in Naver on September 3, 2024 and sell it today you would earn a total of 3,080,000 from holding Naver or generate 17.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Electronics Corp vs. Naver
Performance |
| Timeline |
| Sunny Electronics Corp |
| Naver |
Sunny Electronics and Naver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Electronics and Naver
The main advantage of trading using opposite Sunny Electronics and Naver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Electronics position performs unexpectedly, Naver 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 Naver will offset losses from the drop in Naver's long position.| Sunny Electronics vs. AptaBio Therapeutics | Sunny Electronics vs. Daewoo SBI SPAC | Sunny Electronics vs. Dream Security co | Sunny Electronics vs. Microfriend |
| Naver vs. Ilji Technology Co | Naver vs. Haitai Confectionery Foods | Naver vs. Formetal Co | Naver vs. Seoul Food Industrial |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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