Correlation Between Sungwoo Electronics and Lotte Chilsung
Can any of the company-specific risk be diversified away by investing in both Sungwoo Electronics and Lotte Chilsung 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 Sungwoo Electronics and Lotte Chilsung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungwoo Electronics Co and Lotte Chilsung Beverage, you can compare the effects of market volatilities on Sungwoo Electronics and Lotte Chilsung 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 Sungwoo Electronics with a short position of Lotte Chilsung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungwoo Electronics and Lotte Chilsung.
Diversification Opportunities for Sungwoo Electronics and Lotte Chilsung
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sungwoo and Lotte is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Sungwoo Electronics Co and Lotte Chilsung Beverage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Chilsung Beverage and Sungwoo Electronics 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 Sungwoo Electronics Co are associated (or correlated) with Lotte Chilsung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Chilsung Beverage has no effect on the direction of Sungwoo Electronics i.e., Sungwoo Electronics and Lotte Chilsung go up and down completely randomly.
Pair Corralation between Sungwoo Electronics and Lotte Chilsung
Assuming the 90 days trading horizon Sungwoo Electronics Co is expected to generate 1.59 times more return on investment than Lotte Chilsung. However, Sungwoo Electronics is 1.59 times more volatile than Lotte Chilsung Beverage. It trades about 0.04 of its potential returns per unit of risk. Lotte Chilsung Beverage is currently generating about -0.03 per unit of risk. If you would invest 270,831 in Sungwoo Electronics Co on August 29, 2024 and sell it today you would earn a total of 125,669 from holding Sungwoo Electronics Co or generate 46.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.63% |
| Values | Daily Returns |
Sungwoo Electronics Co vs. Lotte Chilsung Beverage
Performance |
| Timeline |
| Sungwoo Electronics |
| Lotte Chilsung Beverage |
Sungwoo Electronics and Lotte Chilsung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungwoo Electronics and Lotte Chilsung
The main advantage of trading using opposite Sungwoo Electronics and Lotte Chilsung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungwoo Electronics position performs unexpectedly, Lotte Chilsung 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 Lotte Chilsung will offset losses from the drop in Lotte Chilsung's long position.| Sungwoo Electronics vs. AptaBio Therapeutics | Sungwoo Electronics vs. Daewoo SBI SPAC | Sungwoo Electronics vs. Dream Security co | Sungwoo Electronics vs. Microfriend |
| Lotte Chilsung vs. Stic Investments | Lotte Chilsung vs. Heungkuk Metaltech CoLtd | Lotte Chilsung vs. Pureun Mutual Savings | Lotte Chilsung vs. Dongbang Transport Logistics |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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