Correlation Between Sungchang Autotech and Incar Financial
Can any of the company-specific risk be diversified away by investing in both Sungchang Autotech and Incar Financial 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 Incar Financial 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 Incar Financial Service, you can compare the effects of market volatilities on Sungchang Autotech and Incar Financial 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 Incar Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungchang Autotech and Incar Financial.
Diversification Opportunities for Sungchang Autotech and Incar Financial
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sungchang and Incar is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Sungchang Autotech Co and Incar Financial Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Incar Financial Service 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 Incar Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Incar Financial Service has no effect on the direction of Sungchang Autotech i.e., Sungchang Autotech and Incar Financial go up and down completely randomly.
Pair Corralation between Sungchang Autotech and Incar Financial
Assuming the 90 days trading horizon Sungchang Autotech Co is expected to generate 0.47 times more return on investment than Incar Financial. However, Sungchang Autotech Co is 2.14 times less risky than Incar Financial. It trades about 0.25 of its potential returns per unit of risk. Incar Financial Service is currently generating about -0.31 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungchang Autotech Co vs. Incar Financial Service
Performance |
| Timeline |
| Sungchang Autotech |
| Incar Financial Service |
Sungchang Autotech and Incar Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungchang Autotech and Incar Financial
The main advantage of trading using opposite Sungchang Autotech and Incar Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungchang Autotech position performs unexpectedly, Incar Financial 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 Incar Financial will offset losses from the drop in Incar Financial's long position.| Sungchang Autotech vs. Jb Financial | Sungchang Autotech vs. Industrial Bank | Sungchang Autotech vs. Air Busan Co | Sungchang Autotech vs. Sejong Telecom |
| Incar Financial vs. Nice Information Telecommunication | Incar Financial vs. Shinsegae Food | Incar Financial vs. Sungchang Autotech Co | Incar Financial vs. Samlip General Foods |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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