Correlation Between Sungmoon Electronics and Daou Data
Can any of the company-specific risk be diversified away by investing in both Sungmoon Electronics and Daou Data 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 Daou Data 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 Daou Data Corp, you can compare the effects of market volatilities on Sungmoon Electronics and Daou Data 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 Daou Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungmoon Electronics and Daou Data.
Diversification Opportunities for Sungmoon Electronics and Daou Data
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sungmoon and Daou is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sungmoon Electronics Co and Daou Data Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daou Data Corp 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 Daou Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daou Data Corp has no effect on the direction of Sungmoon Electronics i.e., Sungmoon Electronics and Daou Data go up and down completely randomly.
Pair Corralation between Sungmoon Electronics and Daou Data
Assuming the 90 days trading horizon Sungmoon Electronics Co is expected to generate 1.15 times more return on investment than Daou Data. However, Sungmoon Electronics is 1.15 times more volatile than Daou Data Corp. It trades about -0.02 of its potential returns per unit of risk. Daou Data Corp is currently generating about -0.04 per unit of risk. If you would invest 850,970 in Sungmoon Electronics Co on September 2, 2024 and sell it today you would lose (407,470) from holding Sungmoon Electronics Co or give up 47.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungmoon Electronics Co vs. Daou Data Corp
Performance |
| Timeline |
| Sungmoon Electronics |
| Daou Data Corp |
Sungmoon Electronics and Daou Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungmoon Electronics and Daou Data
The main advantage of trading using opposite Sungmoon Electronics and Daou Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungmoon Electronics position performs unexpectedly, Daou Data 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 Daou Data will offset losses from the drop in Daou Data's long position.| Sungmoon Electronics vs. Pungguk Ethanol Industrial | Sungmoon Electronics vs. Cheryong Industrial CoLtd | Sungmoon Electronics vs. Seoul Food Industrial | Sungmoon Electronics vs. RF Materials Co |
| Daou Data vs. Samsung Electronics Co | Daou Data vs. Samsung Electronics Co | Daou Data vs. KB Financial Group | Daou Data vs. Shinhan Financial Group |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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