Correlation Between Isu Chemical and Sungdo Engineering
Can any of the company-specific risk be diversified away by investing in both Isu Chemical and Sungdo Engineering 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 Isu Chemical and Sungdo Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Isu Chemical Co and Sungdo Engineering Construction, you can compare the effects of market volatilities on Isu Chemical and Sungdo Engineering 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 Isu Chemical with a short position of Sungdo Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Isu Chemical and Sungdo Engineering.
Diversification Opportunities for Isu Chemical and Sungdo Engineering
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Isu and Sungdo is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Isu Chemical Co and Sungdo Engineering Constructio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungdo Engineering and Isu Chemical 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 Isu Chemical Co are associated (or correlated) with Sungdo Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungdo Engineering has no effect on the direction of Isu Chemical i.e., Isu Chemical and Sungdo Engineering go up and down completely randomly.
Pair Corralation between Isu Chemical and Sungdo Engineering
Assuming the 90 days trading horizon Isu Chemical Co is expected to generate 1.92 times more return on investment than Sungdo Engineering. However, Isu Chemical is 1.92 times more volatile than Sungdo Engineering Construction. It trades about -0.03 of its potential returns per unit of risk. Sungdo Engineering Construction is currently generating about -0.74 per unit of risk. If you would invest 652,000 in Isu Chemical Co on November 7, 2024 and sell it today you would lose (14,000) from holding Isu Chemical Co or give up 2.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Isu Chemical Co vs. Sungdo Engineering Constructio
Performance |
| Timeline |
| Isu Chemical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sungdo Engineering |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Isu Chemical and Sungdo Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Isu Chemical and Sungdo Engineering
The main advantage of trading using opposite Isu Chemical and Sungdo Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Isu Chemical position performs unexpectedly, Sungdo Engineering 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 Sungdo Engineering will offset losses from the drop in Sungdo Engineering's long position.| Isu Chemical vs. Woori Technology | Isu Chemical vs. Seoul Electronics Telecom | Isu Chemical vs. Dongwoon Anatech Co | Isu Chemical vs. PNC Technologies co |
| Sungdo Engineering vs. Koh Young Technology | Sungdo Engineering vs. Hana Financial | Sungdo Engineering vs. Samsung Securities |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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