Correlation Between Sungmoon Electronics and KyungIn Electronics
Can any of the company-specific risk be diversified away by investing in both Sungmoon Electronics and KyungIn 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 KyungIn 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 KyungIn Electronics Co, you can compare the effects of market volatilities on Sungmoon Electronics and KyungIn 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 KyungIn Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungmoon Electronics and KyungIn Electronics.
Diversification Opportunities for Sungmoon Electronics and KyungIn Electronics
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sungmoon and KyungIn is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sungmoon Electronics Co and KyungIn Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KyungIn 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 KyungIn Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KyungIn Electronics has no effect on the direction of Sungmoon Electronics i.e., Sungmoon Electronics and KyungIn Electronics go up and down completely randomly.
Pair Corralation between Sungmoon Electronics and KyungIn Electronics
Assuming the 90 days trading horizon Sungmoon Electronics Co is expected to under-perform the KyungIn Electronics. In addition to that, Sungmoon Electronics is 1.17 times more volatile than KyungIn Electronics Co. It trades about -0.02 of its total potential returns per unit of risk. KyungIn Electronics Co is currently generating about 0.0 per unit of volatility. If you would invest 2,602,042 in KyungIn Electronics Co on August 28, 2024 and sell it today you would lose (452,042) from holding KyungIn Electronics Co or give up 17.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungmoon Electronics Co vs. KyungIn Electronics Co
Performance |
| Timeline |
| Sungmoon Electronics |
| KyungIn Electronics |
Sungmoon Electronics and KyungIn Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungmoon Electronics and KyungIn Electronics
The main advantage of trading using opposite Sungmoon Electronics and KyungIn Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungmoon Electronics position performs unexpectedly, KyungIn 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 KyungIn Electronics will offset losses from the drop in KyungIn Electronics' long position.| Sungmoon Electronics vs. Samlip General Foods | Sungmoon Electronics vs. Korea Alcohol Industrial | Sungmoon Electronics vs. Jeong Moon Information | Sungmoon Electronics vs. Moadata Co |
| KyungIn Electronics vs. FOODWELL Co | KyungIn Electronics vs. Organic Special Pet | KyungIn Electronics vs. CJ Seafood Corp | KyungIn Electronics vs. CJ Seafood Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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