Correlation Between Sungwoo Electronics and Korea Refractories
Can any of the company-specific risk be diversified away by investing in both Sungwoo Electronics and Korea Refractories 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 Korea Refractories 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 Korea Refractories Co, you can compare the effects of market volatilities on Sungwoo Electronics and Korea Refractories 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 Korea Refractories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungwoo Electronics and Korea Refractories.
Diversification Opportunities for Sungwoo Electronics and Korea Refractories
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sungwoo and Korea is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sungwoo Electronics Co and Korea Refractories Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Refractories 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 Korea Refractories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Refractories has no effect on the direction of Sungwoo Electronics i.e., Sungwoo Electronics and Korea Refractories go up and down completely randomly.
Pair Corralation between Sungwoo Electronics and Korea Refractories
Assuming the 90 days trading horizon Sungwoo Electronics Co is expected to under-perform the Korea Refractories. In addition to that, Sungwoo Electronics is 1.55 times more volatile than Korea Refractories Co. It trades about -0.35 of its total potential returns per unit of risk. Korea Refractories Co is currently generating about -0.21 per unit of volatility. If you would invest 229,000 in Korea Refractories Co on September 3, 2024 and sell it today you would lose (17,000) from holding Korea Refractories Co or give up 7.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungwoo Electronics Co vs. Korea Refractories Co
Performance |
| Timeline |
| Sungwoo Electronics |
| Korea Refractories |
Sungwoo Electronics and Korea Refractories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungwoo Electronics and Korea Refractories
The main advantage of trading using opposite Sungwoo Electronics and Korea Refractories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungwoo Electronics position performs unexpectedly, Korea Refractories 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 Korea Refractories will offset losses from the drop in Korea Refractories' long position.| Sungwoo Electronics vs. AptaBio Therapeutics | Sungwoo Electronics vs. Daewoo SBI SPAC | Sungwoo Electronics vs. Dream Security co | Sungwoo Electronics vs. Microfriend |
| Korea Refractories vs. Eagon Industrial Co | Korea Refractories vs. Shinhan Financial Group | Korea Refractories vs. Korean Reinsurance Co | Korea Refractories vs. Seoul Food Industrial |
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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