Correlation Between Sungwoo Electronics and INNOX Advanced
Can any of the company-specific risk be diversified away by investing in both Sungwoo Electronics and INNOX Advanced 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 INNOX Advanced 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 INNOX Advanced Materials, you can compare the effects of market volatilities on Sungwoo Electronics and INNOX Advanced 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 INNOX Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungwoo Electronics and INNOX Advanced.
Diversification Opportunities for Sungwoo Electronics and INNOX Advanced
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sungwoo and INNOX is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sungwoo Electronics Co and INNOX Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INNOX Advanced Materials 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 INNOX Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INNOX Advanced Materials has no effect on the direction of Sungwoo Electronics i.e., Sungwoo Electronics and INNOX Advanced go up and down completely randomly.
Pair Corralation between Sungwoo Electronics and INNOX Advanced
Assuming the 90 days trading horizon Sungwoo Electronics Co is expected to generate 0.92 times more return on investment than INNOX Advanced. However, Sungwoo Electronics Co is 1.08 times less risky than INNOX Advanced. It trades about 0.04 of its potential returns per unit of risk. INNOX Advanced Materials is currently generating about -0.01 per unit of risk. If you would invest 260,500 in Sungwoo Electronics Co on August 31, 2024 and sell it today you would earn a total of 114,500 from holding Sungwoo Electronics Co or generate 43.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.66% |
| Values | Daily Returns |
Sungwoo Electronics Co vs. INNOX Advanced Materials
Performance |
| Timeline |
| Sungwoo Electronics |
| INNOX Advanced Materials |
Sungwoo Electronics and INNOX Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungwoo Electronics and INNOX Advanced
The main advantage of trading using opposite Sungwoo Electronics and INNOX Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungwoo Electronics position performs unexpectedly, INNOX Advanced 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 INNOX Advanced will offset losses from the drop in INNOX Advanced's long position.| Sungwoo Electronics vs. AptaBio Therapeutics | Sungwoo Electronics vs. Daewoo SBI SPAC | Sungwoo Electronics vs. Dream Security co | Sungwoo Electronics vs. Microfriend |
| INNOX Advanced vs. SK Hynix | INNOX Advanced vs. LX Semicon Co | INNOX Advanced vs. Tokai Carbon Korea | INNOX Advanced vs. People Technology |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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