Correlation Between Korea Shipbuilding and Sungchang Autotech
Can any of the company-specific risk be diversified away by investing in both Korea Shipbuilding 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 Korea Shipbuilding and Sungchang Autotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Shipbuilding Offshore and Sungchang Autotech Co, you can compare the effects of market volatilities on Korea Shipbuilding 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 Korea Shipbuilding with a short position of Sungchang Autotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Shipbuilding and Sungchang Autotech.
Diversification Opportunities for Korea Shipbuilding and Sungchang Autotech
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and Sungchang is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Korea Shipbuilding Offshore and Sungchang Autotech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungchang Autotech and Korea Shipbuilding 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 Korea Shipbuilding Offshore 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 Korea Shipbuilding i.e., Korea Shipbuilding and Sungchang Autotech go up and down completely randomly.
Pair Corralation between Korea Shipbuilding and Sungchang Autotech
Assuming the 90 days trading horizon Korea Shipbuilding Offshore is expected to generate 1.0 times more return on investment than Sungchang Autotech. However, Korea Shipbuilding is 1.0 times more volatile than Sungchang Autotech Co. It trades about 0.19 of its potential returns per unit of risk. Sungchang Autotech Co is currently generating about -0.17 per unit of risk. If you would invest 18,340,000 in Korea Shipbuilding Offshore on September 1, 2024 and sell it today you would earn a total of 2,110,000 from holding Korea Shipbuilding Offshore or generate 11.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Shipbuilding Offshore vs. Sungchang Autotech Co
Performance |
| Timeline |
| Korea Shipbuilding |
| Sungchang Autotech |
Korea Shipbuilding and Sungchang Autotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Shipbuilding and Sungchang Autotech
The main advantage of trading using opposite Korea Shipbuilding and Sungchang Autotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Shipbuilding 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.| Korea Shipbuilding vs. Korea New Network | Korea Shipbuilding vs. ICD Co | Korea Shipbuilding vs. DYPNF CoLtd | Korea Shipbuilding vs. Busan Industrial Co |
| Sungchang Autotech vs. Konan Technology | Sungchang Autotech vs. Korea Shipbuilding Offshore | Sungchang Autotech vs. Nasmedia Co | Sungchang Autotech vs. JYP Entertainment Corp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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