Correlation Between Nasmedia and Sungchang Autotech
Can any of the company-specific risk be diversified away by investing in both Nasmedia and Sungchang Autotech 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 Nasmedia and Sungchang Autotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasmedia Co and Sungchang Autotech Co, you can compare the effects of market volatilities on Nasmedia and Sungchang Autotech 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 Nasmedia with a short position of Sungchang Autotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasmedia and Sungchang Autotech.
Diversification Opportunities for Nasmedia and Sungchang Autotech
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nasmedia and Sungchang is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Nasmedia Co and Sungchang Autotech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungchang Autotech and Nasmedia 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 Nasmedia Co are associated (or correlated) with Sungchang Autotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungchang Autotech has no effect on the direction of Nasmedia i.e., Nasmedia and Sungchang Autotech go up and down completely randomly.
Pair Corralation between Nasmedia and Sungchang Autotech
Assuming the 90 days trading horizon Nasmedia Co is expected to under-perform the Sungchang Autotech. But the stock apears to be less risky and, when comparing its historical volatility, Nasmedia Co is 1.55 times less risky than Sungchang Autotech. The stock trades about -0.11 of its potential returns per unit of risk. The Sungchang Autotech Co is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 462,000 in Sungchang Autotech Co on September 3, 2024 and sell it today you would lose (77,500) from holding Sungchang Autotech Co or give up 16.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasmedia Co vs. Sungchang Autotech Co
Performance |
| Timeline |
| Nasmedia |
| Sungchang Autotech |
Nasmedia and Sungchang Autotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasmedia and Sungchang Autotech
The main advantage of trading using opposite Nasmedia and Sungchang Autotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasmedia position performs unexpectedly, Sungchang Autotech 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 Sungchang Autotech will offset losses from the drop in Sungchang Autotech's long position.| Nasmedia vs. Korea New Network | Nasmedia vs. ICD Co | Nasmedia vs. DYPNF CoLtd | Nasmedia vs. Busan Industrial Co |
| Sungchang Autotech vs. Korea Real Estate | Sungchang Autotech vs. Busan Industrial Co | Sungchang Autotech vs. UNISEM Co | Sungchang Autotech vs. RPBio Inc |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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