Correlation Between Sunny Electronics and Sejong Telecom
Can any of the company-specific risk be diversified away by investing in both Sunny Electronics and Sejong Telecom 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 Sejong Telecom 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 Sejong Telecom, you can compare the effects of market volatilities on Sunny Electronics and Sejong Telecom 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 Sejong Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Electronics and Sejong Telecom.
Diversification Opportunities for Sunny Electronics and Sejong Telecom
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sunny and Sejong is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Electronics Corp and Sejong Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sejong Telecom 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 Sejong Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sejong Telecom has no effect on the direction of Sunny Electronics i.e., Sunny Electronics and Sejong Telecom go up and down completely randomly.
Pair Corralation between Sunny Electronics and Sejong Telecom
Assuming the 90 days trading horizon Sunny Electronics Corp is expected to under-perform the Sejong Telecom. But the stock apears to be less risky and, when comparing its historical volatility, Sunny Electronics Corp is 1.73 times less risky than Sejong Telecom. The stock trades about -0.04 of its potential returns per unit of risk. The Sejong Telecom is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 59,182 in Sejong Telecom on September 1, 2024 and sell it today you would lose (15,082) from holding Sejong Telecom or give up 25.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.82% |
| Values | Daily Returns |
Sunny Electronics Corp vs. Sejong Telecom
Performance |
| Timeline |
| Sunny Electronics Corp |
| Sejong Telecom |
Sunny Electronics and Sejong Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Electronics and Sejong Telecom
The main advantage of trading using opposite Sunny Electronics and Sejong Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Electronics position performs unexpectedly, Sejong Telecom 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 Sejong Telecom will offset losses from the drop in Sejong Telecom's long position.| Sunny Electronics vs. AptaBio Therapeutics | Sunny Electronics vs. Daewoo SBI SPAC | Sunny Electronics vs. Dream Security co | Sunny Electronics vs. Microfriend |
| Sejong Telecom vs. AfreecaTV Co | Sejong Telecom vs. Seegene | Sejong Telecom vs. SS TECH | Sejong Telecom vs. Busan Industrial 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Stocks Directory Find actively traded stocks across global markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |