Correlation Between SungMoon Electronics and Handok Clean
Can any of the company-specific risk be diversified away by investing in both SungMoon Electronics and Handok Clean 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 Handok Clean 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 Handok Clean Tech, you can compare the effects of market volatilities on SungMoon Electronics and Handok Clean 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 Handok Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of SungMoon Electronics and Handok Clean.
Diversification Opportunities for SungMoon Electronics and Handok Clean
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SungMoon and Handok is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding SungMoon Electronics Co and Handok Clean Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Handok Clean Tech 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 Handok Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Handok Clean Tech has no effect on the direction of SungMoon Electronics i.e., SungMoon Electronics and Handok Clean go up and down completely randomly.
Pair Corralation between SungMoon Electronics and Handok Clean
Assuming the 90 days trading horizon SungMoon Electronics is expected to generate 1.76 times less return on investment than Handok Clean. In addition to that, SungMoon Electronics is 1.64 times more volatile than Handok Clean Tech. It trades about 0.18 of its total potential returns per unit of risk. Handok Clean Tech is currently generating about 0.5 per unit of volatility. If you would invest 578,073 in Handok Clean Tech on October 14, 2024 and sell it today you would earn a total of 68,927 from holding Handok Clean Tech or generate 11.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SungMoon Electronics Co vs. Handok Clean Tech
Performance |
| Timeline |
| SungMoon Electronics |
| Handok Clean Tech |
SungMoon Electronics and Handok Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SungMoon Electronics and Handok Clean
The main advantage of trading using opposite SungMoon Electronics and Handok Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SungMoon Electronics position performs unexpectedly, Handok Clean 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 Handok Clean will offset losses from the drop in Handok Clean's long position.| SungMoon Electronics vs. Youngbo Chemical Co | SungMoon Electronics vs. iNtRON Biotechnology | SungMoon Electronics vs. Daou Technology | SungMoon Electronics vs. Hanil Chemical Ind |
| Handok Clean vs. Hanjoo Light Metal | Handok Clean vs. Kbi Metal Co | Handok Clean vs. Daiyang Metal Co | Handok Clean vs. SungMoon Electronics 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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