Correlation Between ECSTELECOM and Sunny Electronics
Can any of the company-specific risk be diversified away by investing in both ECSTELECOM and Sunny 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 ECSTELECOM and Sunny Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECSTELECOM Co and Sunny Electronics Corp, you can compare the effects of market volatilities on ECSTELECOM and Sunny 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 ECSTELECOM with a short position of Sunny Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECSTELECOM and Sunny Electronics.
Diversification Opportunities for ECSTELECOM and Sunny Electronics
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ECSTELECOM and Sunny is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding ECSTELECOM Co and Sunny Electronics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Electronics Corp and ECSTELECOM 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 ECSTELECOM Co are associated (or correlated) with Sunny Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Electronics Corp has no effect on the direction of ECSTELECOM i.e., ECSTELECOM and Sunny Electronics go up and down completely randomly.
Pair Corralation between ECSTELECOM and Sunny Electronics
Assuming the 90 days trading horizon ECSTELECOM Co is expected to under-perform the Sunny Electronics. But the stock apears to be less risky and, when comparing its historical volatility, ECSTELECOM Co is 1.65 times less risky than Sunny Electronics. The stock trades about -0.03 of its potential returns per unit of risk. The Sunny Electronics Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 275,386 in Sunny Electronics Corp on November 19, 2024 and sell it today you would lose (73,386) from holding Sunny Electronics Corp or give up 26.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECSTELECOM Co vs. Sunny Electronics Corp
Performance |
| Timeline |
| ECSTELECOM |
| Sunny Electronics Corp |
ECSTELECOM and Sunny Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECSTELECOM and Sunny Electronics
The main advantage of trading using opposite ECSTELECOM and Sunny Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECSTELECOM position performs unexpectedly, Sunny 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 Sunny Electronics will offset losses from the drop in Sunny Electronics' long position.| ECSTELECOM vs. FNC Entertainment Co | ECSTELECOM vs. Lotte Data Communication | ECSTELECOM vs. Kaonmedia Co | ECSTELECOM vs. Kisan Telecom Co |
| Sunny Electronics vs. SV Investment | Sunny Electronics vs. KTB Investment Securities | Sunny Electronics vs. Korea Investment Holdings | Sunny Electronics vs. Nice Information Telecommunication |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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