Correlation Between LockLock and Sungchang Autotech
Can any of the company-specific risk be diversified away by investing in both LockLock 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 LockLock and Sungchang Autotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LockLock Co and Sungchang Autotech Co, you can compare the effects of market volatilities on LockLock 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 LockLock with a short position of Sungchang Autotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of LockLock and Sungchang Autotech.
Diversification Opportunities for LockLock and Sungchang Autotech
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LockLock and Sungchang is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding LockLock 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 LockLock 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 LockLock 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 LockLock i.e., LockLock and Sungchang Autotech go up and down completely randomly.
Pair Corralation between LockLock and Sungchang Autotech
Assuming the 90 days trading horizon LockLock Co is expected to generate 0.04 times more return on investment than Sungchang Autotech. However, LockLock Co is 28.44 times less risky than Sungchang Autotech. It trades about -0.07 of its potential returns per unit of risk. Sungchang Autotech Co is currently generating about -0.14 per unit of risk. If you would invest 867,000 in LockLock Co on September 14, 2024 and sell it today you would lose (1,000.00) from holding LockLock Co or give up 0.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
LockLock Co vs. Sungchang Autotech Co
Performance |
| Timeline |
| LockLock |
| Sungchang Autotech |
LockLock and Sungchang Autotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LockLock and Sungchang Autotech
The main advantage of trading using opposite LockLock and Sungchang Autotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LockLock 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.| LockLock vs. Dongbu Steel Co | LockLock vs. LG Display Co | LockLock vs. Moonbae Steel | LockLock vs. Wonil Special Steel |
| Sungchang Autotech vs. Daou Data Corp | Sungchang Autotech vs. Solution Advanced Technology | Sungchang Autotech vs. Busan Industrial Co | Sungchang Autotech vs. Busan Ind |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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