Correlation Between SungMoon Electronics and Korea Real
Can any of the company-specific risk be diversified away by investing in both SungMoon Electronics and Korea Real 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 SungMoon Electronics and Korea Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SungMoon Electronics Co and Korea Real Estate, you can compare the effects of market volatilities on SungMoon Electronics and Korea Real 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 SungMoon Electronics with a short position of Korea Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of SungMoon Electronics and Korea Real.
Diversification Opportunities for SungMoon Electronics and Korea Real
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SungMoon and Korea is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding SungMoon Electronics Co and Korea Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Real Estate and SungMoon 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 SungMoon Electronics Co are associated (or correlated) with Korea Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Real Estate has no effect on the direction of SungMoon Electronics i.e., SungMoon Electronics and Korea Real go up and down completely randomly.
Pair Corralation between SungMoon Electronics and Korea Real
Assuming the 90 days trading horizon SungMoon Electronics Co is expected to generate 1.79 times more return on investment than Korea Real. However, SungMoon Electronics is 1.79 times more volatile than Korea Real Estate. It trades about 0.22 of its potential returns per unit of risk. Korea Real Estate is currently generating about -0.19 per unit of risk. If you would invest 108,100 in SungMoon Electronics Co on October 25, 2024 and sell it today you would earn a total of 8,300 from holding SungMoon Electronics Co or generate 7.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SungMoon Electronics Co vs. Korea Real Estate
Performance |
| Timeline |
| SungMoon Electronics |
| Korea Real Estate |
SungMoon Electronics and Korea Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SungMoon Electronics and Korea Real
The main advantage of trading using opposite SungMoon Electronics and Korea Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SungMoon Electronics position performs unexpectedly, Korea Real 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 Korea Real will offset losses from the drop in Korea Real's long position.| SungMoon Electronics vs. KB Financial Group | SungMoon Electronics vs. Shinhan Financial Group | SungMoon Electronics vs. Hana Financial | SungMoon Electronics vs. Woori Financial Group |
| Korea Real vs. SungMoon Electronics Co | Korea Real vs. Hyundai Home Shopping | Korea Real vs. Hankook Furniture Co | Korea Real vs. Lotte Chilsung Beverage |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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