Correlation Between Sungdo Engineering and Choil Aluminum
Can any of the company-specific risk be diversified away by investing in both Sungdo Engineering and Choil Aluminum 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 Choil Aluminum 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 Choil Aluminum, you can compare the effects of market volatilities on Sungdo Engineering and Choil Aluminum 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 Choil Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungdo Engineering and Choil Aluminum.
Diversification Opportunities for Sungdo Engineering and Choil Aluminum
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sungdo and Choil is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sungdo Engineering Constructio and Choil Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choil Aluminum 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 Choil Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choil Aluminum has no effect on the direction of Sungdo Engineering i.e., Sungdo Engineering and Choil Aluminum go up and down completely randomly.
Pair Corralation between Sungdo Engineering and Choil Aluminum
Assuming the 90 days trading horizon Sungdo Engineering is expected to generate 1.11 times less return on investment than Choil Aluminum. In addition to that, Sungdo Engineering is 1.8 times more volatile than Choil Aluminum. It trades about 0.07 of its total potential returns per unit of risk. Choil Aluminum is currently generating about 0.13 per unit of volatility. If you would invest 143,000 in Choil Aluminum on October 14, 2024 and sell it today you would earn a total of 4,400 from holding Choil Aluminum or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungdo Engineering Constructio vs. Choil Aluminum
Performance |
| Timeline |
| Sungdo Engineering |
| Choil Aluminum |
Sungdo Engineering and Choil Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungdo Engineering and Choil Aluminum
The main advantage of trading using opposite Sungdo Engineering and Choil Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungdo Engineering position performs unexpectedly, Choil Aluminum 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 Choil Aluminum will offset losses from the drop in Choil Aluminum's long position.| Sungdo Engineering vs. Incar Financial Service | Sungdo Engineering vs. KakaoBank Corp | Sungdo Engineering vs. Daishin Information Communications | Sungdo Engineering vs. Nable Communications |
| Choil Aluminum vs. Samyang Foods Co | Choil Aluminum vs. Sam Yang Foods | Choil Aluminum vs. Seoam Machinery Industry | Choil Aluminum vs. Sungdo Engineering Construction |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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