Correlation Between Sungmoon Electronics and Coloray International
Can any of the company-specific risk be diversified away by investing in both Sungmoon Electronics and Coloray International 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 Coloray International 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 Coloray International Investment, you can compare the effects of market volatilities on Sungmoon Electronics and Coloray International 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 Coloray International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungmoon Electronics and Coloray International.
Diversification Opportunities for Sungmoon Electronics and Coloray International
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sungmoon and Coloray is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Sungmoon Electronics Co and Coloray International Investme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coloray International 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 Coloray International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coloray International has no effect on the direction of Sungmoon Electronics i.e., Sungmoon Electronics and Coloray International go up and down completely randomly.
Pair Corralation between Sungmoon Electronics and Coloray International
Assuming the 90 days trading horizon Sungmoon Electronics is expected to generate 6.54 times less return on investment than Coloray International. In addition to that, Sungmoon Electronics is 1.5 times more volatile than Coloray International Investment. It trades about 0.07 of its total potential returns per unit of risk. Coloray International Investment is currently generating about 0.67 per unit of volatility. If you would invest 55,900 in Coloray International Investment on November 3, 2024 and sell it today you would earn a total of 20,800 from holding Coloray International Investment or generate 37.21% 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. Coloray International Investme
Performance |
| Timeline |
| Sungmoon Electronics |
| Coloray International |
Sungmoon Electronics and Coloray International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungmoon Electronics and Coloray International
The main advantage of trading using opposite Sungmoon Electronics and Coloray International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungmoon Electronics position performs unexpectedly, Coloray International 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 Coloray International will offset losses from the drop in Coloray International's long position.| Sungmoon Electronics vs. SungMoon Electronics Co | Sungmoon Electronics vs. T3 Entertainment Co | Sungmoon Electronics vs. Daewoo Electronic Components | Sungmoon Electronics vs. Samyoung Electronics Co |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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