Correlation Between Kbi Metal and SungMoon Electronics
Can any of the company-specific risk be diversified away by investing in both Kbi Metal and SungMoon Electronics 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 Kbi Metal and SungMoon Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kbi Metal Co and SungMoon Electronics Co, you can compare the effects of market volatilities on Kbi Metal and SungMoon Electronics 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 Kbi Metal with a short position of SungMoon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and SungMoon Electronics.
Diversification Opportunities for Kbi Metal and SungMoon Electronics
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kbi and SungMoon is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co and SungMoon Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SungMoon Electronics and Kbi Metal 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 Kbi Metal Co are associated (or correlated) with SungMoon Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SungMoon Electronics has no effect on the direction of Kbi Metal i.e., Kbi Metal and SungMoon Electronics go up and down completely randomly.
Pair Corralation between Kbi Metal and SungMoon Electronics
Assuming the 90 days trading horizon Kbi Metal Co is expected to under-perform the SungMoon Electronics. In addition to that, Kbi Metal is 2.5 times more volatile than SungMoon Electronics Co. It trades about -0.32 of its total potential returns per unit of risk. SungMoon Electronics Co is currently generating about -0.4 per unit of volatility. If you would invest 124,600 in SungMoon Electronics Co on August 29, 2024 and sell it today you would lose (13,500) from holding SungMoon Electronics Co or give up 10.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kbi Metal Co vs. SungMoon Electronics Co
Performance |
| Timeline |
| Kbi Metal |
| SungMoon Electronics |
Kbi Metal and SungMoon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kbi Metal and SungMoon Electronics
The main advantage of trading using opposite Kbi Metal and SungMoon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal position performs unexpectedly, SungMoon Electronics 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 SungMoon Electronics will offset losses from the drop in SungMoon Electronics' long position.| Kbi Metal vs. Busan Industrial Co | Kbi Metal vs. Busan Ind | Kbi Metal vs. Mirae Asset Daewoo | Kbi Metal vs. UNISEM Co |
| SungMoon Electronics vs. AptaBio Therapeutics | SungMoon Electronics vs. Daewoo SBI SPAC | SungMoon Electronics vs. Dream Security co | SungMoon Electronics vs. Microfriend |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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