Correlation Between Sungchang Autotech and SKONEC Entertainment
Can any of the company-specific risk be diversified away by investing in both Sungchang Autotech and SKONEC Entertainment 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 SKONEC Entertainment 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 SKONEC Entertainment Co, you can compare the effects of market volatilities on Sungchang Autotech and SKONEC Entertainment 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 SKONEC Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungchang Autotech and SKONEC Entertainment.
Diversification Opportunities for Sungchang Autotech and SKONEC Entertainment
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sungchang and SKONEC is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sungchang Autotech Co and SKONEC Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SKONEC Entertainment 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 SKONEC Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SKONEC Entertainment has no effect on the direction of Sungchang Autotech i.e., Sungchang Autotech and SKONEC Entertainment go up and down completely randomly.
Pair Corralation between Sungchang Autotech and SKONEC Entertainment
Assuming the 90 days trading horizon Sungchang Autotech Co is expected to generate 0.55 times more return on investment than SKONEC Entertainment. However, Sungchang Autotech Co is 1.83 times less risky than SKONEC Entertainment. It trades about -0.07 of its potential returns per unit of risk. SKONEC Entertainment Co is currently generating about -0.07 per unit of risk. If you would invest 741,995 in Sungchang Autotech Co on October 16, 2024 and sell it today you would lose (371,995) from holding Sungchang Autotech Co or give up 50.13% 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. SKONEC Entertainment Co
Performance |
| Timeline |
| Sungchang Autotech |
| SKONEC Entertainment |
Sungchang Autotech and SKONEC Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungchang Autotech and SKONEC Entertainment
The main advantage of trading using opposite Sungchang Autotech and SKONEC Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungchang Autotech position performs unexpectedly, SKONEC Entertainment 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 SKONEC Entertainment will offset losses from the drop in SKONEC Entertainment's long position.| Sungchang Autotech vs. Sam Yang Foods | Sungchang Autotech vs. Iljin Display | Sungchang Autotech vs. Asiana Airlines | Sungchang Autotech vs. Hanwha Life Insurance |
| SKONEC Entertainment vs. Sungchang Autotech Co | SKONEC Entertainment vs. Sangsin Energy Display | SKONEC Entertainment vs. Ssangyong Information Communication | SKONEC Entertainment vs. Nable Communications |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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