Correlation Between Sungwoo Electronics and Automobile
Can any of the company-specific risk be diversified away by investing in both Sungwoo Electronics and Automobile 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 Automobile 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 Automobile Pc, you can compare the effects of market volatilities on Sungwoo Electronics and Automobile 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 Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungwoo Electronics and Automobile.
Diversification Opportunities for Sungwoo Electronics and Automobile
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sungwoo and Automobile is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sungwoo Electronics Co and Automobile Pc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automobile Pc 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 Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automobile Pc has no effect on the direction of Sungwoo Electronics i.e., Sungwoo Electronics and Automobile go up and down completely randomly.
Pair Corralation between Sungwoo Electronics and Automobile
Assuming the 90 days trading horizon Sungwoo Electronics Co is expected to generate 0.8 times more return on investment than Automobile. However, Sungwoo Electronics Co is 1.25 times less risky than Automobile. It trades about 0.04 of its potential returns per unit of risk. Automobile Pc is currently generating about -0.04 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 Together |
| Strength | Insignificant |
| Accuracy | 95.63% |
| Values | Daily Returns |
Sungwoo Electronics Co vs. Automobile Pc
Performance |
| Timeline |
| Sungwoo Electronics |
| Automobile Pc |
Sungwoo Electronics and Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungwoo Electronics and Automobile
The main advantage of trading using opposite Sungwoo Electronics and Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungwoo Electronics position performs unexpectedly, Automobile 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 Automobile will offset losses from the drop in Automobile's long position.| Sungwoo Electronics vs. AptaBio Therapeutics | Sungwoo Electronics vs. Daewoo SBI SPAC | Sungwoo Electronics vs. Dream Security co | Sungwoo Electronics vs. Microfriend |
| Automobile vs. Busan Industrial Co | Automobile vs. Busan Ind | Automobile vs. Mirae Asset Daewoo | Automobile vs. UNISEM Co |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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