Correlation Between Sungchang Autotech and Daewoo Electronic
Can any of the company-specific risk be diversified away by investing in both Sungchang Autotech and Daewoo Electronic 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 Sungchang Autotech and Daewoo Electronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungchang Autotech Co and Daewoo Electronic Components, you can compare the effects of market volatilities on Sungchang Autotech and Daewoo Electronic 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 Sungchang Autotech with a short position of Daewoo Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungchang Autotech and Daewoo Electronic.
Diversification Opportunities for Sungchang Autotech and Daewoo Electronic
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sungchang and Daewoo is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Sungchang Autotech Co and Daewoo Electronic Components in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewoo Electronic and Sungchang Autotech 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 Sungchang Autotech Co are associated (or correlated) with Daewoo Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewoo Electronic has no effect on the direction of Sungchang Autotech i.e., Sungchang Autotech and Daewoo Electronic go up and down completely randomly.
Pair Corralation between Sungchang Autotech and Daewoo Electronic
Assuming the 90 days trading horizon Sungchang Autotech Co is expected to generate 1.47 times more return on investment than Daewoo Electronic. However, Sungchang Autotech is 1.47 times more volatile than Daewoo Electronic Components. It trades about 0.25 of its potential returns per unit of risk. Daewoo Electronic Components is currently generating about -0.08 per unit of risk. If you would invest 353,007 in Sungchang Autotech Co on October 12, 2024 and sell it today you would earn a total of 17,993 from holding Sungchang Autotech Co or generate 5.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungchang Autotech Co vs. Daewoo Electronic Components
Performance |
| Timeline |
| Sungchang Autotech |
| Daewoo Electronic |
Sungchang Autotech and Daewoo Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungchang Autotech and Daewoo Electronic
The main advantage of trading using opposite Sungchang Autotech and Daewoo Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungchang Autotech position performs unexpectedly, Daewoo Electronic 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 Daewoo Electronic will offset losses from the drop in Daewoo Electronic's long position.| Sungchang Autotech vs. DB Financial Investment | Sungchang Autotech vs. NH Investment Securities | Sungchang Autotech vs. Daol Investment Securities | Sungchang Autotech vs. Nam Hwa Construction |
| Daewoo Electronic vs. Hwangkum Steel Technology | Daewoo Electronic vs. SEOWONINTECHCoLtd | Daewoo Electronic vs. LS Materials | Daewoo Electronic vs. Sungchang Autotech Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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