Correlation Between Sungmoon Electronics and Samsung Publishing
Can any of the company-specific risk be diversified away by investing in both Sungmoon Electronics and Samsung Publishing 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 Samsung Publishing 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 Samsung Publishing Co, you can compare the effects of market volatilities on Sungmoon Electronics and Samsung Publishing 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 Samsung Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungmoon Electronics and Samsung Publishing.
Diversification Opportunities for Sungmoon Electronics and Samsung Publishing
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sungmoon and Samsung is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Sungmoon Electronics Co and Samsung Publishing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Publishing 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 Samsung Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Publishing has no effect on the direction of Sungmoon Electronics i.e., Sungmoon Electronics and Samsung Publishing go up and down completely randomly.
Pair Corralation between Sungmoon Electronics and Samsung Publishing
Assuming the 90 days trading horizon Sungmoon Electronics Co is expected to generate 1.3 times more return on investment than Samsung Publishing. However, Sungmoon Electronics is 1.3 times more volatile than Samsung Publishing Co. It trades about 0.01 of its potential returns per unit of risk. Samsung Publishing Co is currently generating about -0.05 per unit of risk. If you would invest 488,500 in Sungmoon Electronics Co on October 14, 2024 and sell it today you would lose (18,000) from holding Sungmoon Electronics Co or give up 3.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungmoon Electronics Co vs. Samsung Publishing Co
Performance |
| Timeline |
| Sungmoon Electronics |
| Samsung Publishing |
Sungmoon Electronics and Samsung Publishing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungmoon Electronics and Samsung Publishing
The main advantage of trading using opposite Sungmoon Electronics and Samsung Publishing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungmoon Electronics position performs unexpectedly, Samsung Publishing 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 Samsung Publishing will offset losses from the drop in Samsung Publishing's long position.| Sungmoon Electronics vs. Daejung Chemicals Metals | Sungmoon Electronics vs. NH Investment Securities | Sungmoon Electronics vs. Stic Investments | Sungmoon Electronics vs. SK Chemicals Co |
| Samsung Publishing vs. Lotte Non Life Insurance | Samsung Publishing vs. Korea Alcohol Industrial | Samsung Publishing vs. Sam Yang Foods | Samsung Publishing 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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