Correlation Between Sungdo Engineering and Jb Financial
Can any of the company-specific risk be diversified away by investing in both Sungdo Engineering and Jb Financial 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 Jb Financial 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 Jb Financial, you can compare the effects of market volatilities on Sungdo Engineering and Jb Financial 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 Jb Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungdo Engineering and Jb Financial.
Diversification Opportunities for Sungdo Engineering and Jb Financial
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sungdo and 175330 is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Sungdo Engineering Constructio and Jb Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jb Financial 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 Jb Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jb Financial has no effect on the direction of Sungdo Engineering i.e., Sungdo Engineering and Jb Financial go up and down completely randomly.
Pair Corralation between Sungdo Engineering and Jb Financial
Assuming the 90 days trading horizon Sungdo Engineering Construction is expected to under-perform the Jb Financial. In addition to that, Sungdo Engineering is 1.06 times more volatile than Jb Financial. It trades about -0.49 of its total potential returns per unit of risk. Jb Financial is currently generating about 0.65 per unit of volatility. If you would invest 1,580,000 in Jb Financial on November 1, 2024 and sell it today you would earn a total of 357,000 from holding Jb Financial or generate 22.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungdo Engineering Constructio vs. Jb Financial
Performance |
| Timeline |
| Sungdo Engineering |
| Jb Financial |
Sungdo Engineering and Jb Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungdo Engineering and Jb Financial
The main advantage of trading using opposite Sungdo Engineering and Jb Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungdo Engineering position performs unexpectedly, Jb Financial 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 Jb Financial will offset losses from the drop in Jb Financial's long position.The idea behind Sungdo Engineering Construction and Jb Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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