Correlation Between SungMoon Electronics and Daewoo SBI
Can any of the company-specific risk be diversified away by investing in both SungMoon Electronics and Daewoo SBI 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 Daewoo SBI 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 Daewoo SBI SPAC, you can compare the effects of market volatilities on SungMoon Electronics and Daewoo SBI 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 Daewoo SBI. Check out your portfolio center. Please also check ongoing floating volatility patterns of SungMoon Electronics and Daewoo SBI.
Diversification Opportunities for SungMoon Electronics and Daewoo SBI
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SungMoon and Daewoo is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding SungMoon Electronics Co and Daewoo SBI SPAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewoo SBI SPAC 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 Daewoo SBI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewoo SBI SPAC has no effect on the direction of SungMoon Electronics i.e., SungMoon Electronics and Daewoo SBI go up and down completely randomly.
Pair Corralation between SungMoon Electronics and Daewoo SBI
Assuming the 90 days trading horizon SungMoon Electronics Co is expected to generate 0.85 times more return on investment than Daewoo SBI. However, SungMoon Electronics Co is 1.18 times less risky than Daewoo SBI. It trades about -0.22 of its potential returns per unit of risk. Daewoo SBI SPAC is currently generating about -0.23 per unit of risk. If you would invest 126,000 in SungMoon Electronics Co on August 29, 2024 and sell it today you would lose (14,900) from holding SungMoon Electronics Co or give up 11.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SungMoon Electronics Co vs. Daewoo SBI SPAC
Performance |
| Timeline |
| SungMoon Electronics |
| Daewoo SBI SPAC |
SungMoon Electronics and Daewoo SBI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SungMoon Electronics and Daewoo SBI
The main advantage of trading using opposite SungMoon Electronics and Daewoo SBI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SungMoon Electronics position performs unexpectedly, Daewoo SBI 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 Daewoo SBI will offset losses from the drop in Daewoo SBI's long position.| SungMoon Electronics vs. AptaBio Therapeutics | SungMoon Electronics vs. Daewoo SBI SPAC | SungMoon Electronics vs. Dream Security co | SungMoon Electronics vs. Microfriend |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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