Correlation Between Sungmoon Electronics and Insung Information
Can any of the company-specific risk be diversified away by investing in both Sungmoon Electronics and Insung Information 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 Insung Information 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 Insung Information Co, you can compare the effects of market volatilities on Sungmoon Electronics and Insung Information 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 Insung Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungmoon Electronics and Insung Information.
Diversification Opportunities for Sungmoon Electronics and Insung Information
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sungmoon and Insung is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Sungmoon Electronics Co and Insung Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insung Information 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 Insung Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insung Information has no effect on the direction of Sungmoon Electronics i.e., Sungmoon Electronics and Insung Information go up and down completely randomly.
Pair Corralation between Sungmoon Electronics and Insung Information
Assuming the 90 days trading horizon Sungmoon Electronics Co is expected to generate 1.54 times more return on investment than Insung Information. However, Sungmoon Electronics is 1.54 times more volatile than Insung Information Co. It trades about 0.06 of its potential returns per unit of risk. Insung Information Co is currently generating about -0.01 per unit of risk. If you would invest 455,000 in Sungmoon Electronics Co on October 26, 2024 and sell it today you would earn a total of 35,500 from holding Sungmoon Electronics Co or generate 7.8% 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. Insung Information Co
Performance |
| Timeline |
| Sungmoon Electronics |
| Insung Information |
Sungmoon Electronics and Insung Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungmoon Electronics and Insung Information
The main advantage of trading using opposite Sungmoon Electronics and Insung Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungmoon Electronics position performs unexpectedly, Insung Information 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 Insung Information will offset losses from the drop in Insung Information's long position.| Sungmoon Electronics vs. Insung Information Co | Sungmoon Electronics vs. Keyang Electric Machinery | Sungmoon Electronics vs. INFINITT Healthcare Co | Sungmoon Electronics vs. Infinitt Healthcare Co |
| Insung Information vs. Samsung Electronics Co | Insung Information vs. Samsung Electronics Co | Insung Information vs. SK Hynix | Insung Information vs. HMM 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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