Correlation Between Sungmoon Electronics and KT
Can any of the company-specific risk be diversified away by investing in both Sungmoon Electronics and KT 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 KT 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 KT Corporation, you can compare the effects of market volatilities on Sungmoon Electronics and KT 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 KT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungmoon Electronics and KT.
Diversification Opportunities for Sungmoon Electronics and KT
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sungmoon and KT is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sungmoon Electronics Co and KT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Corporation 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 KT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KT Corporation has no effect on the direction of Sungmoon Electronics i.e., Sungmoon Electronics and KT go up and down completely randomly.
Pair Corralation between Sungmoon Electronics and KT
Assuming the 90 days trading horizon Sungmoon Electronics Co is expected to under-perform the KT. In addition to that, Sungmoon Electronics is 2.4 times more volatile than KT Corporation. It trades about -0.02 of its total potential returns per unit of risk. KT Corporation is currently generating about 0.1 per unit of volatility. If you would invest 2,672,084 in KT Corporation on September 12, 2024 and sell it today you would earn a total of 1,712,916 from holding KT Corporation or generate 64.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungmoon Electronics Co vs. KT Corp.
Performance |
| Timeline |
| Sungmoon Electronics |
| KT Corporation |
Sungmoon Electronics and KT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungmoon Electronics and KT
The main advantage of trading using opposite Sungmoon Electronics and KT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungmoon Electronics position performs unexpectedly, KT 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 KT will offset losses from the drop in KT's long position.| Sungmoon Electronics vs. DAEDUCK ELECTRONICS CoLtd | Sungmoon Electronics vs. Iljin Display | Sungmoon Electronics vs. Solution Advanced Technology | Sungmoon Electronics vs. Busan Industrial Co |
| KT vs. Daejoo Electronic Materials | KT vs. CJ Seafood Corp | KT vs. Samji Electronics Co | KT 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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