Correlation Between Hanil Chemical and Sungmoon Electronics
Can any of the company-specific risk be diversified away by investing in both Hanil Chemical and Sungmoon Electronics 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 Hanil Chemical and Sungmoon Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanil Chemical Ind and Sungmoon Electronics Co, you can compare the effects of market volatilities on Hanil Chemical and Sungmoon Electronics 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 Hanil Chemical with a short position of Sungmoon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanil Chemical and Sungmoon Electronics.
Diversification Opportunities for Hanil Chemical and Sungmoon Electronics
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hanil and Sungmoon is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hanil Chemical Ind and Sungmoon Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungmoon Electronics and Hanil 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 Hanil Chemical Ind are associated (or correlated) with Sungmoon Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungmoon Electronics has no effect on the direction of Hanil Chemical i.e., Hanil Chemical and Sungmoon Electronics go up and down completely randomly.
Pair Corralation between Hanil Chemical and Sungmoon Electronics
Assuming the 90 days trading horizon Hanil Chemical is expected to generate 2.76 times less return on investment than Sungmoon Electronics. But when comparing it to its historical volatility, Hanil Chemical Ind is 1.91 times less risky than Sungmoon Electronics. It trades about 0.14 of its potential returns per unit of risk. Sungmoon Electronics Co is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 392,000 in Sungmoon Electronics Co on October 11, 2024 and sell it today you would earn a total of 75,500 from holding Sungmoon Electronics Co or generate 19.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanil Chemical Ind vs. Sungmoon Electronics Co
Performance |
| Timeline |
| Hanil Chemical Ind |
| Sungmoon Electronics |
Hanil Chemical and Sungmoon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanil Chemical and Sungmoon Electronics
The main advantage of trading using opposite Hanil Chemical and Sungmoon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanil Chemical position performs unexpectedly, Sungmoon Electronics 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 Sungmoon Electronics will offset losses from the drop in Sungmoon Electronics' long position.| Hanil Chemical vs. Hanjoo Light Metal | Hanil Chemical vs. Cloud Air CoLtd | Hanil Chemical vs. Daejung Chemicals Metals | Hanil Chemical vs. Formetal Co |
| Sungmoon Electronics vs. Hanil Chemical Ind | Sungmoon Electronics vs. Kg Chemical | Sungmoon Electronics vs. SK Chemicals Co | Sungmoon Electronics vs. Daejung Chemicals Metals |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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