Correlation Between Kukdong Oil and Sung Bo
Can any of the company-specific risk be diversified away by investing in both Kukdong Oil and Sung Bo 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 Kukdong Oil and Sung Bo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kukdong Oil Chemicals and Sung Bo Chemicals, you can compare the effects of market volatilities on Kukdong Oil and Sung Bo 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 Kukdong Oil with a short position of Sung Bo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukdong Oil and Sung Bo.
Diversification Opportunities for Kukdong Oil and Sung Bo
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kukdong and Sung is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Kukdong Oil Chemicals and Sung Bo Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sung Bo Chemicals and Kukdong Oil 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 Kukdong Oil Chemicals are associated (or correlated) with Sung Bo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sung Bo Chemicals has no effect on the direction of Kukdong Oil i.e., Kukdong Oil and Sung Bo go up and down completely randomly.
Pair Corralation between Kukdong Oil and Sung Bo
Assuming the 90 days trading horizon Kukdong Oil Chemicals is expected to under-perform the Sung Bo. In addition to that, Kukdong Oil is 2.12 times more volatile than Sung Bo Chemicals. It trades about -0.02 of its total potential returns per unit of risk. Sung Bo Chemicals is currently generating about -0.02 per unit of volatility. If you would invest 266,725 in Sung Bo Chemicals on November 5, 2024 and sell it today you would lose (16,725) from holding Sung Bo Chemicals or give up 6.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kukdong Oil Chemicals vs. Sung Bo Chemicals
Performance |
| Timeline |
| Kukdong Oil Chemicals |
| Sung Bo Chemicals |
Kukdong Oil and Sung Bo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukdong Oil and Sung Bo
The main advantage of trading using opposite Kukdong Oil and Sung Bo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukdong Oil position performs unexpectedly, Sung Bo 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 Sung Bo will offset losses from the drop in Sung Bo's long position.| Kukdong Oil vs. AptaBio Therapeutics | Kukdong Oil vs. Daewoo SBI SPAC | Kukdong Oil vs. Dream Security co | Kukdong Oil vs. Microfriend |
| Sung Bo vs. Daesung Industrial Co | Sung Bo vs. DB Financial Investment | Sung Bo vs. KTB Investment Securities | Sung Bo vs. EBEST Investment 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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