Correlation Between ChipsMedia and SungMoon Electronics
Can any of the company-specific risk be diversified away by investing in both ChipsMedia and SungMoon Electronics 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 ChipsMedia and SungMoon Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChipsMedia and SungMoon Electronics Co, you can compare the effects of market volatilities on ChipsMedia and SungMoon Electronics 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 ChipsMedia with a short position of SungMoon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChipsMedia and SungMoon Electronics.
Diversification Opportunities for ChipsMedia and SungMoon Electronics
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between ChipsMedia and SungMoon is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding ChipsMedia and SungMoon Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SungMoon Electronics and ChipsMedia 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 ChipsMedia are associated (or correlated) with SungMoon Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SungMoon Electronics has no effect on the direction of ChipsMedia i.e., ChipsMedia and SungMoon Electronics go up and down completely randomly.
Pair Corralation between ChipsMedia and SungMoon Electronics
Assuming the 90 days trading horizon ChipsMedia is expected to generate 1.91 times more return on investment than SungMoon Electronics. However, ChipsMedia is 1.91 times more volatile than SungMoon Electronics Co. It trades about 0.03 of its potential returns per unit of risk. SungMoon Electronics Co is currently generating about -0.01 per unit of risk. If you would invest 1,470,469 in ChipsMedia on October 16, 2024 and sell it today you would earn a total of 144,531 from holding ChipsMedia or generate 9.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChipsMedia vs. SungMoon Electronics Co
Performance |
| Timeline |
| ChipsMedia |
| SungMoon Electronics |
ChipsMedia and SungMoon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChipsMedia and SungMoon Electronics
The main advantage of trading using opposite ChipsMedia and SungMoon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChipsMedia position performs unexpectedly, SungMoon Electronics 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 SungMoon Electronics will offset losses from the drop in SungMoon Electronics' long position.| ChipsMedia vs. INFINITT Healthcare Co | ChipsMedia vs. Hana Materials | ChipsMedia vs. Kolon Plastics | ChipsMedia vs. Korean Reinsurance Co |
| SungMoon Electronics vs. Sungchang Autotech Co | SungMoon Electronics vs. PH Tech Co | SungMoon Electronics vs. DONGKUK TED METAL | SungMoon Electronics vs. Kbi Metal 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |