Correlation Between Spolytech and Sungdo Engineering
Can any of the company-specific risk be diversified away by investing in both Spolytech and Sungdo Engineering 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 Spolytech and Sungdo Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spolytech Co and Sungdo Engineering Construction, you can compare the effects of market volatilities on Spolytech and Sungdo Engineering 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 Spolytech with a short position of Sungdo Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spolytech and Sungdo Engineering.
Diversification Opportunities for Spolytech and Sungdo Engineering
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Spolytech and Sungdo is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Spolytech Co and Sungdo Engineering Constructio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungdo Engineering and Spolytech 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 Spolytech Co are associated (or correlated) with Sungdo Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungdo Engineering has no effect on the direction of Spolytech i.e., Spolytech and Sungdo Engineering go up and down completely randomly.
Pair Corralation between Spolytech and Sungdo Engineering
Assuming the 90 days trading horizon Spolytech Co is expected to generate 0.47 times more return on investment than Sungdo Engineering. However, Spolytech Co is 2.13 times less risky than Sungdo Engineering. It trades about 0.46 of its potential returns per unit of risk. Sungdo Engineering Construction is currently generating about 0.0 per unit of risk. If you would invest 146,100 in Spolytech Co on December 4, 2024 and sell it today you would earn a total of 16,500 from holding Spolytech Co or generate 11.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spolytech Co vs. Sungdo Engineering Constructio
Performance |
| Timeline |
| Spolytech |
| Sungdo Engineering |
Spolytech and Sungdo Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spolytech and Sungdo Engineering
The main advantage of trading using opposite Spolytech and Sungdo Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spolytech position performs unexpectedly, Sungdo Engineering 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 Sungdo Engineering will offset losses from the drop in Sungdo Engineering's long position.| Spolytech vs. Hanjoo Light Metal | Spolytech vs. Heungkuk Metaltech CoLtd | Spolytech vs. Young Heung Iron | Spolytech vs. Hyundai BNG Steel |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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