Correlation Between Sungwoo Hitech and Synopex
Can any of the company-specific risk be diversified away by investing in both Sungwoo Hitech and Synopex 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 Sungwoo Hitech and Synopex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungwoo Hitech Co and Synopex, you can compare the effects of market volatilities on Sungwoo Hitech and Synopex 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 Sungwoo Hitech with a short position of Synopex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungwoo Hitech and Synopex.
Diversification Opportunities for Sungwoo Hitech and Synopex
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sungwoo and Synopex is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Sungwoo Hitech Co and Synopex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synopex and Sungwoo Hitech 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 Sungwoo Hitech Co are associated (or correlated) with Synopex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synopex has no effect on the direction of Sungwoo Hitech i.e., Sungwoo Hitech and Synopex go up and down completely randomly.
Pair Corralation between Sungwoo Hitech and Synopex
Assuming the 90 days trading horizon Sungwoo Hitech Co is expected to under-perform the Synopex. But the stock apears to be less risky and, when comparing its historical volatility, Sungwoo Hitech Co is 1.93 times less risky than Synopex. The stock trades about -0.25 of its potential returns per unit of risk. The Synopex is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 715,000 in Synopex on August 28, 2024 and sell it today you would lose (83,000) from holding Synopex or give up 11.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sungwoo Hitech Co vs. Synopex
Performance |
| Timeline |
| Sungwoo Hitech |
| Synopex |
Sungwoo Hitech and Synopex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungwoo Hitech and Synopex
The main advantage of trading using opposite Sungwoo Hitech and Synopex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungwoo Hitech position performs unexpectedly, Synopex 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 Synopex will offset losses from the drop in Synopex's long position.| Sungwoo Hitech vs. Soulbrain Holdings Co | Sungwoo Hitech vs. Posco ICT | Sungwoo Hitech vs. SFA Engineering | Sungwoo Hitech vs. Tae Kwang |
| Synopex vs. Korea Real Estate | Synopex vs. Korea Ratings Co | Synopex vs. IQuest Co | Synopex vs. Wonbang Tech 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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