Correlation Between Sung Kwang and Soulbrain Holdings
Can any of the company-specific risk be diversified away by investing in both Sung Kwang and Soulbrain Holdings 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 Sung Kwang and Soulbrain Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sung Kwang Bend and Soulbrain Holdings Co, you can compare the effects of market volatilities on Sung Kwang and Soulbrain Holdings 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 Sung Kwang with a short position of Soulbrain Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sung Kwang and Soulbrain Holdings.
Diversification Opportunities for Sung Kwang and Soulbrain Holdings
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sung and Soulbrain is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sung Kwang Bend and Soulbrain Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soulbrain Holdings and Sung Kwang 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 Sung Kwang Bend are associated (or correlated) with Soulbrain Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soulbrain Holdings has no effect on the direction of Sung Kwang i.e., Sung Kwang and Soulbrain Holdings go up and down completely randomly.
Pair Corralation between Sung Kwang and Soulbrain Holdings
Assuming the 90 days trading horizon Sung Kwang Bend is expected to generate 0.65 times more return on investment than Soulbrain Holdings. However, Sung Kwang Bend is 1.53 times less risky than Soulbrain Holdings. It trades about 0.06 of its potential returns per unit of risk. Soulbrain Holdings Co is currently generating about 0.03 per unit of risk. If you would invest 1,326,529 in Sung Kwang Bend on January 24, 2025 and sell it today you would earn a total of 1,358,471 from holding Sung Kwang Bend or generate 102.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sung Kwang Bend vs. Soulbrain Holdings Co
Performance |
| Timeline |
| Sung Kwang Bend |
| Soulbrain Holdings |
Sung Kwang and Soulbrain Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sung Kwang and Soulbrain Holdings
The main advantage of trading using opposite Sung Kwang and Soulbrain Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sung Kwang position performs unexpectedly, Soulbrain Holdings 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 Soulbrain Holdings will offset losses from the drop in Soulbrain Holdings' long position.| Sung Kwang vs. Samsung Electronics Co | Sung Kwang vs. Samsung Electronics Co | Sung Kwang vs. Hyundai Motor Co | Sung Kwang vs. Hyundai Motor Co |
| Soulbrain Holdings vs. SFA Engineering | Soulbrain Holdings vs. Seoul Semiconductor Co | Soulbrain Holdings vs. Wonik Ips Co |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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