Correlation Between Anam Electronics and Sungchang Autotech
Can any of the company-specific risk be diversified away by investing in both Anam Electronics and Sungchang Autotech 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 Anam Electronics and Sungchang Autotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anam Electronics Co and Sungchang Autotech Co, you can compare the effects of market volatilities on Anam Electronics and Sungchang Autotech 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 Anam Electronics with a short position of Sungchang Autotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anam Electronics and Sungchang Autotech.
Diversification Opportunities for Anam Electronics and Sungchang Autotech
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Anam and Sungchang is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Anam Electronics Co and Sungchang Autotech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungchang Autotech and Anam 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 Anam Electronics Co are associated (or correlated) with Sungchang Autotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungchang Autotech has no effect on the direction of Anam Electronics i.e., Anam Electronics and Sungchang Autotech go up and down completely randomly.
Pair Corralation between Anam Electronics and Sungchang Autotech
Assuming the 90 days trading horizon Anam Electronics Co is expected to under-perform the Sungchang Autotech. In addition to that, Anam Electronics is 1.5 times more volatile than Sungchang Autotech Co. It trades about -0.04 of its total potential returns per unit of risk. Sungchang Autotech Co is currently generating about 0.12 per unit of volatility. If you would invest 350,049 in Sungchang Autotech Co on October 25, 2024 and sell it today you would earn a total of 8,951 from holding Sungchang Autotech Co or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anam Electronics Co vs. Sungchang Autotech Co
Performance |
| Timeline |
| Anam Electronics |
| Sungchang Autotech |
Anam Electronics and Sungchang Autotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anam Electronics and Sungchang Autotech
The main advantage of trading using opposite Anam Electronics and Sungchang Autotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anam Electronics position performs unexpectedly, Sungchang Autotech 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 Sungchang Autotech will offset losses from the drop in Sungchang Autotech's long position.| Anam Electronics vs. Wireless Power Amplifier | Anam Electronics vs. Sungdo Engineering Construction | Anam Electronics vs. Camus Engineering Construction | Anam Electronics vs. Samji Electronics Co |
| Sungchang Autotech vs. Samsung Electronics Co | Sungchang Autotech vs. Samsung Electronics Co | Sungchang Autotech vs. KB Financial Group | Sungchang Autotech vs. Shinhan Financial Group |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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