Correlation Between Sungchang Autotech and Seoam Machinery
Can any of the company-specific risk be diversified away by investing in both Sungchang Autotech and Seoam Machinery 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 Seoam Machinery 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 Seoam Machinery Industry, you can compare the effects of market volatilities on Sungchang Autotech and Seoam Machinery 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 Seoam Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungchang Autotech and Seoam Machinery.
Diversification Opportunities for Sungchang Autotech and Seoam Machinery
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sungchang and Seoam is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sungchang Autotech Co and Seoam Machinery Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoam Machinery Industry 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 Seoam Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoam Machinery Industry has no effect on the direction of Sungchang Autotech i.e., Sungchang Autotech and Seoam Machinery go up and down completely randomly.
Pair Corralation between Sungchang Autotech and Seoam Machinery
Assuming the 90 days trading horizon Sungchang Autotech is expected to generate 1.97 times less return on investment than Seoam Machinery. But when comparing it to its historical volatility, Sungchang Autotech Co is 1.55 times less risky than Seoam Machinery. It trades about 0.17 of its potential returns per unit of risk. Seoam Machinery Industry is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 358,441 in Seoam Machinery Industry on October 14, 2024 and sell it today you would earn a total of 25,059 from holding Seoam Machinery Industry or generate 6.99% 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. Seoam Machinery Industry
Performance |
| Timeline |
| Sungchang Autotech |
| Seoam Machinery Industry |
Sungchang Autotech and Seoam Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungchang Autotech and Seoam Machinery
The main advantage of trading using opposite Sungchang Autotech and Seoam Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungchang Autotech position performs unexpectedly, Seoam Machinery 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 Seoam Machinery will offset losses from the drop in Seoam Machinery's long position.| Sungchang Autotech vs. Wireless Power Amplifier | Sungchang Autotech vs. NewFlex Technology Co | Sungchang Autotech vs. Woori Technology | Sungchang Autotech vs. Bosung Power Technology |
| Seoam Machinery vs. Sungchang Autotech Co | Seoam Machinery vs. A Tech Solution Co | Seoam Machinery vs. Digital Imaging Technology | Seoam Machinery vs. FNSTech 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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