Correlation Between Sungmoon Electronics and Jin Air
Can any of the company-specific risk be diversified away by investing in both Sungmoon Electronics and Jin Air 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 Jin Air 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 Jin Air Co, you can compare the effects of market volatilities on Sungmoon Electronics and Jin Air 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 Jin Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungmoon Electronics and Jin Air.
Diversification Opportunities for Sungmoon Electronics and Jin Air
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sungmoon and Jin is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Sungmoon Electronics Co and Jin Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jin Air 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 Jin Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jin Air has no effect on the direction of Sungmoon Electronics i.e., Sungmoon Electronics and Jin Air go up and down completely randomly.
Pair Corralation between Sungmoon Electronics and Jin Air
Assuming the 90 days trading horizon Sungmoon Electronics Co is expected to generate 1.48 times more return on investment than Jin Air. However, Sungmoon Electronics is 1.48 times more volatile than Jin Air Co. It trades about 0.0 of its potential returns per unit of risk. Jin Air Co is currently generating about -0.1 per unit of risk. If you would invest 492,000 in Sungmoon Electronics Co on November 6, 2024 and sell it today you would lose (20,000) from holding Sungmoon Electronics Co or give up 4.07% 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. Jin Air Co
Performance |
| Timeline |
| Sungmoon Electronics |
| Jin Air |
Sungmoon Electronics and Jin Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungmoon Electronics and Jin Air
The main advantage of trading using opposite Sungmoon Electronics and Jin Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungmoon Electronics position performs unexpectedly, Jin Air 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 Jin Air will offset losses from the drop in Jin Air's long position.| Sungmoon Electronics vs. LG Household Healthcare | Sungmoon Electronics vs. Chorokbaem Healthcare Co | Sungmoon Electronics vs. SH Energy Chemical | Sungmoon Electronics vs. Youl Chon Chemical |
| Jin Air vs. Seers Technology | Jin Air vs. SK Chemicals Co | Jin Air vs. Ilji Technology Co | Jin Air vs. Guyoung Technology 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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