Correlation Between Sungchang Autotech and Dongil Metal
Can any of the company-specific risk be diversified away by investing in both Sungchang Autotech and Dongil 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 Dongil 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 Dongil Metal Co, you can compare the effects of market volatilities on Sungchang Autotech and Dongil 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 Dongil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungchang Autotech and Dongil Metal.
Diversification Opportunities for Sungchang Autotech and Dongil Metal
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sungchang and Dongil is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Sungchang Autotech Co and Dongil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil 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 Dongil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Metal has no effect on the direction of Sungchang Autotech i.e., Sungchang Autotech and Dongil Metal go up and down completely randomly.
Pair Corralation between Sungchang Autotech and Dongil Metal
Assuming the 90 days trading horizon Sungchang Autotech is expected to generate 1.24 times less return on investment than Dongil Metal. But when comparing it to its historical volatility, Sungchang Autotech Co is 1.37 times less risky than Dongil Metal. It trades about 0.25 of its potential returns per unit of risk. Dongil Metal Co is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 763,000 in Dongil Metal Co on October 12, 2024 and sell it today you would earn a total of 48,000 from holding Dongil Metal Co or generate 6.29% 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. Dongil Metal Co
Performance |
| Timeline |
| Sungchang Autotech |
| Dongil Metal |
Sungchang Autotech and Dongil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungchang Autotech and Dongil Metal
The main advantage of trading using opposite Sungchang Autotech and Dongil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungchang Autotech position performs unexpectedly, Dongil 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 Dongil Metal will offset losses from the drop in Dongil Metal's long position.| Sungchang Autotech vs. Jb Financial | Sungchang Autotech vs. Industrial Bank | Sungchang Autotech vs. Air Busan Co | Sungchang Autotech vs. Sejong Telecom |
| Dongil Metal vs. Sungchang Autotech Co | Dongil Metal vs. A Tech Solution Co | Dongil Metal vs. Woori Financial Group | Dongil Metal vs. Pureun Mutual Savings |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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