Correlation Between Sungchang Autotech and Kukil Metal
Can any of the company-specific risk be diversified away by investing in both Sungchang Autotech and Kukil Metal 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 Kukil Metal 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 Kukil Metal Co, you can compare the effects of market volatilities on Sungchang Autotech and Kukil Metal 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 Kukil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungchang Autotech and Kukil Metal.
Diversification Opportunities for Sungchang Autotech and Kukil Metal
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sungchang and Kukil is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sungchang Autotech Co and Kukil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukil Metal 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 Kukil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukil Metal has no effect on the direction of Sungchang Autotech i.e., Sungchang Autotech and Kukil Metal go up and down completely randomly.
Pair Corralation between Sungchang Autotech and Kukil Metal
Assuming the 90 days trading horizon Sungchang Autotech Co is expected to generate 1.75 times more return on investment than Kukil Metal. However, Sungchang Autotech is 1.75 times more volatile than Kukil Metal Co. It trades about -0.05 of its potential returns per unit of risk. Kukil Metal Co is currently generating about -0.14 per unit of risk. If you would invest 420,500 in Sungchang Autotech Co on August 28, 2024 and sell it today you would lose (39,000) from holding Sungchang Autotech Co or give up 9.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungchang Autotech Co vs. Kukil Metal Co
Performance |
| Timeline |
| Sungchang Autotech |
| Kukil Metal |
Sungchang Autotech and Kukil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungchang Autotech and Kukil Metal
The main advantage of trading using opposite Sungchang Autotech and Kukil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungchang Autotech position performs unexpectedly, Kukil Metal 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 Kukil Metal will offset losses from the drop in Kukil Metal's long position.| Sungchang Autotech vs. Busan Industrial Co | Sungchang Autotech vs. Busan Ind | Sungchang Autotech vs. Mirae Asset Daewoo | Sungchang Autotech vs. UNISEM Co |
| Kukil Metal vs. Keum Kang Steel | Kukil Metal vs. Tplex Co | Kukil Metal vs. PJ Metal Co | Kukil Metal vs. Samhyun Steel 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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