Correlation Between Sunny Electronics and HJ ShipBuilding
Can any of the company-specific risk be diversified away by investing in both Sunny Electronics and HJ ShipBuilding 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 HJ ShipBuilding 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 HJ ShipBuilding Construction, you can compare the effects of market volatilities on Sunny Electronics and HJ ShipBuilding 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 HJ ShipBuilding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Electronics and HJ ShipBuilding.
Diversification Opportunities for Sunny Electronics and HJ ShipBuilding
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sunny and 097230 is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Electronics Corp and HJ ShipBuilding Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HJ ShipBuilding Cons 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 HJ ShipBuilding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HJ ShipBuilding Cons has no effect on the direction of Sunny Electronics i.e., Sunny Electronics and HJ ShipBuilding go up and down completely randomly.
Pair Corralation between Sunny Electronics and HJ ShipBuilding
Assuming the 90 days trading horizon Sunny Electronics Corp is expected to generate 0.97 times more return on investment than HJ ShipBuilding. However, Sunny Electronics Corp is 1.03 times less risky than HJ ShipBuilding. It trades about 0.32 of its potential returns per unit of risk. HJ ShipBuilding Construction is currently generating about 0.18 per unit of risk. If you would invest 161,500 in Sunny Electronics Corp on September 13, 2024 and sell it today you would earn a total of 98,000 from holding Sunny Electronics Corp or generate 60.68% 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. HJ ShipBuilding Construction
Performance |
| Timeline |
| Sunny Electronics Corp |
| HJ ShipBuilding Cons |
Sunny Electronics and HJ ShipBuilding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Electronics and HJ ShipBuilding
The main advantage of trading using opposite Sunny Electronics and HJ ShipBuilding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Electronics position performs unexpectedly, HJ ShipBuilding 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 HJ ShipBuilding will offset losses from the drop in HJ ShipBuilding's long position.| Sunny Electronics vs. Samsung Electronics Co | Sunny Electronics vs. Samsung Electronics Co | Sunny Electronics vs. SK Hynix | Sunny Electronics vs. POSCO Holdings |
| HJ ShipBuilding vs. Kisan Telecom Co | HJ ShipBuilding vs. Korean Drug Co | HJ ShipBuilding vs. CJ Seafood Corp | HJ ShipBuilding vs. Sejong Telecom |
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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