Correlation Between Sungmoon Electronics and PJ Electronics
Can any of the company-specific risk be diversified away by investing in both Sungmoon Electronics and PJ Electronics 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 PJ Electronics 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 PJ Electronics Co, you can compare the effects of market volatilities on Sungmoon Electronics and PJ Electronics 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 PJ Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungmoon Electronics and PJ Electronics.
Diversification Opportunities for Sungmoon Electronics and PJ Electronics
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sungmoon and 006140 is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sungmoon Electronics Co and PJ Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJ Electronics 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 PJ Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PJ Electronics has no effect on the direction of Sungmoon Electronics i.e., Sungmoon Electronics and PJ Electronics go up and down completely randomly.
Pair Corralation between Sungmoon Electronics and PJ Electronics
Assuming the 90 days trading horizon Sungmoon Electronics is expected to generate 1.64 times less return on investment than PJ Electronics. In addition to that, Sungmoon Electronics is 1.36 times more volatile than PJ Electronics Co. It trades about 0.08 of its total potential returns per unit of risk. PJ Electronics Co is currently generating about 0.18 per unit of volatility. If you would invest 488,500 in PJ Electronics Co on November 7, 2024 and sell it today you would earn a total of 41,500 from holding PJ Electronics Co or generate 8.5% 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. PJ Electronics Co
Performance |
| Timeline |
| Sungmoon Electronics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| PJ Electronics |
Sungmoon Electronics and PJ Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungmoon Electronics and PJ Electronics
The main advantage of trading using opposite Sungmoon Electronics and PJ Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungmoon Electronics position performs unexpectedly, PJ Electronics 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 PJ Electronics will offset losses from the drop in PJ Electronics' long position.| Sungmoon Electronics vs. Global Standard Technology | Sungmoon Electronics vs. SS TECH | Sungmoon Electronics vs. Orbitech Co | Sungmoon Electronics vs. A Tech Solution Co |
| PJ Electronics vs. SAMG Entertainment Co | PJ Electronics vs. PH Tech Co | PJ Electronics vs. SEOWONINTECHCoLtd | PJ Electronics vs. Seoul Electronics Telecom |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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