Correlation Between Sungmoon Electronics and Sukgyung
Can any of the company-specific risk be diversified away by investing in both Sungmoon Electronics and Sukgyung 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 Sukgyung 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 Sukgyung AT Co, you can compare the effects of market volatilities on Sungmoon Electronics and Sukgyung 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 Sukgyung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungmoon Electronics and Sukgyung.
Diversification Opportunities for Sungmoon Electronics and Sukgyung
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sungmoon and Sukgyung is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Sungmoon Electronics Co and Sukgyung AT Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sukgyung AT 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 Sukgyung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sukgyung AT has no effect on the direction of Sungmoon Electronics i.e., Sungmoon Electronics and Sukgyung go up and down completely randomly.
Pair Corralation between Sungmoon Electronics and Sukgyung
Assuming the 90 days trading horizon Sungmoon Electronics Co is expected to under-perform the Sukgyung. In addition to that, Sungmoon Electronics is 1.35 times more volatile than Sukgyung AT Co. It trades about -0.31 of its total potential returns per unit of risk. Sukgyung AT Co is currently generating about -0.21 per unit of volatility. If you would invest 4,435,000 in Sukgyung AT Co on September 12, 2024 and sell it today you would lose (465,000) from holding Sukgyung AT Co or give up 10.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungmoon Electronics Co vs. Sukgyung AT Co
Performance |
| Timeline |
| Sungmoon Electronics |
| Sukgyung AT |
Sungmoon Electronics and Sukgyung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungmoon Electronics and Sukgyung
The main advantage of trading using opposite Sungmoon Electronics and Sukgyung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungmoon Electronics position performs unexpectedly, Sukgyung 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 Sukgyung will offset losses from the drop in Sukgyung's long position.| Sungmoon Electronics vs. DAEDUCK ELECTRONICS CoLtd | Sungmoon Electronics vs. Iljin Display | Sungmoon Electronics vs. Solution Advanced Technology | Sungmoon Electronics vs. Busan Industrial Co |
| Sukgyung vs. LG Chem | Sukgyung vs. Chunbo Co | Sukgyung vs. DukSan Neolux CoLtd | Sukgyung vs. Hyosung Chemical Corp |
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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