Correlation Between Sungmoon Electronics and Sangsin Energy
Can any of the company-specific risk be diversified away by investing in both Sungmoon Electronics and Sangsin Energy 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 Sangsin Energy 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 Sangsin Energy Display, you can compare the effects of market volatilities on Sungmoon Electronics and Sangsin Energy 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 Sangsin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungmoon Electronics and Sangsin Energy.
Diversification Opportunities for Sungmoon Electronics and Sangsin Energy
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sungmoon and Sangsin is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sungmoon Electronics Co and Sangsin Energy Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsin Energy Display 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 Sangsin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsin Energy Display has no effect on the direction of Sungmoon Electronics i.e., Sungmoon Electronics and Sangsin Energy go up and down completely randomly.
Pair Corralation between Sungmoon Electronics and Sangsin Energy
Assuming the 90 days trading horizon Sungmoon Electronics Co is expected to under-perform the Sangsin Energy. In addition to that, Sungmoon Electronics is 1.13 times more volatile than Sangsin Energy Display. It trades about -0.36 of its total potential returns per unit of risk. Sangsin Energy Display is currently generating about -0.4 per unit of volatility. If you would invest 1,030,000 in Sangsin Energy Display on August 29, 2024 and sell it today you would lose (216,000) from holding Sangsin Energy Display or give up 20.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungmoon Electronics Co vs. Sangsin Energy Display
Performance |
| Timeline |
| Sungmoon Electronics |
| Sangsin Energy Display |
Sungmoon Electronics and Sangsin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungmoon Electronics and Sangsin Energy
The main advantage of trading using opposite Sungmoon Electronics and Sangsin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungmoon Electronics position performs unexpectedly, Sangsin Energy 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 Sangsin Energy will offset losses from the drop in Sangsin Energy's long position.| Sungmoon Electronics vs. DAEDUCK ELECTRONICS CoLtd | Sungmoon Electronics vs. Iljin Display | Sungmoon Electronics vs. Busan Industrial Co | Sungmoon Electronics vs. Busan Ind |
| Sangsin Energy vs. Samsung Electronics Co | Sangsin Energy vs. Samsung Electronics Co | Sangsin Energy vs. KB Financial Group | Sangsin Energy 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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