Correlation Between Sungdo Engineering and Hanshin Construction
Can any of the company-specific risk be diversified away by investing in both Sungdo Engineering and Hanshin Construction 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 Sungdo Engineering and Hanshin Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungdo Engineering Construction and Hanshin Construction Co, you can compare the effects of market volatilities on Sungdo Engineering and Hanshin Construction 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 Sungdo Engineering with a short position of Hanshin Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungdo Engineering and Hanshin Construction.
Diversification Opportunities for Sungdo Engineering and Hanshin Construction
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sungdo and Hanshin is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sungdo Engineering Constructio and Hanshin Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanshin Construction and Sungdo Engineering 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 Sungdo Engineering Construction are associated (or correlated) with Hanshin Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanshin Construction has no effect on the direction of Sungdo Engineering i.e., Sungdo Engineering and Hanshin Construction go up and down completely randomly.
Pair Corralation between Sungdo Engineering and Hanshin Construction
Assuming the 90 days trading horizon Sungdo Engineering Construction is expected to generate 1.33 times more return on investment than Hanshin Construction. However, Sungdo Engineering is 1.33 times more volatile than Hanshin Construction Co. It trades about 0.01 of its potential returns per unit of risk. Hanshin Construction Co is currently generating about -0.02 per unit of risk. If you would invest 485,727 in Sungdo Engineering Construction on September 5, 2024 and sell it today you would lose (36,727) from holding Sungdo Engineering Construction or give up 7.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungdo Engineering Constructio vs. Hanshin Construction Co
Performance |
| Timeline |
| Sungdo Engineering |
| Hanshin Construction |
Sungdo Engineering and Hanshin Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungdo Engineering and Hanshin Construction
The main advantage of trading using opposite Sungdo Engineering and Hanshin Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungdo Engineering position performs unexpectedly, Hanshin Construction 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 Hanshin Construction will offset losses from the drop in Hanshin Construction's long position.| Sungdo Engineering vs. JYP Entertainment Corp | Sungdo Engineering vs. Next Entertainment World | Sungdo Engineering vs. Cube Entertainment | Sungdo Engineering vs. Korea Petro Chemical |
| Hanshin Construction vs. DB Insurance Co | Hanshin Construction vs. Aprogen Healthcare Games | Hanshin Construction vs. NewFlex Technology Co | Hanshin Construction vs. Global Standard Technology |
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 Stocks Directory module to find actively traded stocks across global markets.
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