Correlation Between SungMoon Electronics and Jeju Air
Can any of the company-specific risk be diversified away by investing in both SungMoon Electronics and Jeju Air 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 Jeju Air 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 Jeju Air Co, you can compare the effects of market volatilities on SungMoon Electronics and Jeju Air 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 Jeju Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of SungMoon Electronics and Jeju Air.
Diversification Opportunities for SungMoon Electronics and Jeju Air
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SungMoon and Jeju is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding SungMoon Electronics Co and Jeju Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Air 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 Jeju Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Air has no effect on the direction of SungMoon Electronics i.e., SungMoon Electronics and Jeju Air go up and down completely randomly.
Pair Corralation between SungMoon Electronics and Jeju Air
Assuming the 90 days trading horizon SungMoon Electronics Co is expected to generate 0.77 times more return on investment than Jeju Air. However, SungMoon Electronics Co is 1.3 times less risky than Jeju Air. It trades about 0.15 of its potential returns per unit of risk. Jeju Air Co is currently generating about -0.24 per unit of risk. If you would invest 111,600 in SungMoon Electronics Co on October 20, 2024 and sell it today you would earn a total of 6,400 from holding SungMoon Electronics Co or generate 5.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SungMoon Electronics Co vs. Jeju Air Co
Performance |
| Timeline |
| SungMoon Electronics |
| Jeju Air |
SungMoon Electronics and Jeju Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SungMoon Electronics and Jeju Air
The main advantage of trading using opposite SungMoon Electronics and Jeju Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SungMoon Electronics position performs unexpectedly, Jeju Air 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 Jeju Air will offset losses from the drop in Jeju Air's long position.| SungMoon Electronics vs. National Plastic Co | SungMoon Electronics vs. Solus Advanced Materials | SungMoon Electronics vs. Dgb Financial | SungMoon Electronics vs. Union Materials Corp |
| Jeju Air vs. Hyundai Industrial Co | Jeju Air vs. Asiana Airlines | Jeju Air vs. Ilji Technology Co | Jeju Air vs. DRB Industrial 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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