Correlation Between Sungchang Autotech and SungMoon Electronics
Can any of the company-specific risk be diversified away by investing in both Sungchang Autotech and SungMoon 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 Sungchang Autotech and SungMoon Electronics 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 SungMoon Electronics Co, you can compare the effects of market volatilities on Sungchang Autotech and SungMoon 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 Sungchang Autotech with a short position of SungMoon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungchang Autotech and SungMoon Electronics.
Diversification Opportunities for Sungchang Autotech and SungMoon Electronics
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sungchang and SungMoon is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Sungchang Autotech Co and SungMoon Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SungMoon Electronics 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 SungMoon Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SungMoon Electronics has no effect on the direction of Sungchang Autotech i.e., Sungchang Autotech and SungMoon Electronics go up and down completely randomly.
Pair Corralation between Sungchang Autotech and SungMoon Electronics
Assuming the 90 days trading horizon Sungchang Autotech Co is expected to under-perform the SungMoon Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Sungchang Autotech Co is 1.29 times less risky than SungMoon Electronics. The stock trades about -0.08 of its potential returns per unit of risk. The SungMoon Electronics Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 110,700 in SungMoon Electronics Co on October 30, 2024 and sell it today you would earn a total of 5,600 from holding SungMoon Electronics Co or generate 5.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungchang Autotech Co vs. SungMoon Electronics Co
Performance |
| Timeline |
| Sungchang Autotech |
| SungMoon Electronics |
Sungchang Autotech and SungMoon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungchang Autotech and SungMoon Electronics
The main advantage of trading using opposite Sungchang Autotech and SungMoon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungchang Autotech position performs unexpectedly, SungMoon 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 SungMoon Electronics will offset losses from the drop in SungMoon Electronics' long position.| Sungchang Autotech vs. Mirai Semiconductors Co | Sungchang Autotech vs. Samlip General Foods | Sungchang Autotech vs. CU Medical Systems | Sungchang Autotech vs. Hannong Chemicals |
| SungMoon Electronics vs. ENF Technology Co | SungMoon Electronics vs. Shinil Industrial Co | SungMoon Electronics vs. HB Technology TD | SungMoon Electronics vs. Daejung Chemicals Metals |
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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