Correlation Between Puloon Technology and Sung Bo
Can any of the company-specific risk be diversified away by investing in both Puloon Technology and Sung Bo 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 Puloon Technology and Sung Bo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Puloon Technology and Sung Bo Chemicals, you can compare the effects of market volatilities on Puloon Technology and Sung Bo 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 Puloon Technology with a short position of Sung Bo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puloon Technology and Sung Bo.
Diversification Opportunities for Puloon Technology and Sung Bo
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Puloon and Sung is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Puloon Technology and Sung Bo Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sung Bo Chemicals and Puloon Technology 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 Puloon Technology are associated (or correlated) with Sung Bo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sung Bo Chemicals has no effect on the direction of Puloon Technology i.e., Puloon Technology and Sung Bo go up and down completely randomly.
Pair Corralation between Puloon Technology and Sung Bo
Assuming the 90 days trading horizon Puloon Technology is expected to generate 2.31 times more return on investment than Sung Bo. However, Puloon Technology is 2.31 times more volatile than Sung Bo Chemicals. It trades about 0.31 of its potential returns per unit of risk. Sung Bo Chemicals is currently generating about 0.0 per unit of risk. If you would invest 672,000 in Puloon Technology on October 28, 2024 and sell it today you would earn a total of 82,000 from holding Puloon Technology or generate 12.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Puloon Technology vs. Sung Bo Chemicals
Performance |
| Timeline |
| Puloon Technology |
| Sung Bo Chemicals |
Puloon Technology and Sung Bo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Puloon Technology and Sung Bo
The main advantage of trading using opposite Puloon Technology and Sung Bo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puloon Technology position performs unexpectedly, Sung Bo 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 Sung Bo will offset losses from the drop in Sung Bo's long position.| Puloon Technology vs. Sempio Foods Co | Puloon Technology vs. CJ Seafood Corp | Puloon Technology vs. Hyundai Green Food | Puloon Technology vs. Organic Special Pet |
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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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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