Correlation Between Chorokbaem Healthcare and SungMoon Electronics
Can any of the company-specific risk be diversified away by investing in both Chorokbaem Healthcare 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 Chorokbaem Healthcare and SungMoon Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chorokbaem Healthcare Co and SungMoon Electronics Co, you can compare the effects of market volatilities on Chorokbaem Healthcare 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 Chorokbaem Healthcare with a short position of SungMoon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chorokbaem Healthcare and SungMoon Electronics.
Diversification Opportunities for Chorokbaem Healthcare and SungMoon Electronics
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chorokbaem and SungMoon is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Chorokbaem Healthcare Co and SungMoon Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SungMoon Electronics and Chorokbaem Healthcare 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 Chorokbaem Healthcare Co 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 Chorokbaem Healthcare i.e., Chorokbaem Healthcare and SungMoon Electronics go up and down completely randomly.
Pair Corralation between Chorokbaem Healthcare and SungMoon Electronics
Assuming the 90 days trading horizon Chorokbaem Healthcare Co is expected to generate 2.41 times more return on investment than SungMoon Electronics. However, Chorokbaem Healthcare is 2.41 times more volatile than SungMoon Electronics Co. It trades about 0.14 of its potential returns per unit of risk. SungMoon Electronics Co is currently generating about 0.25 per unit of risk. If you would invest 29,300 in Chorokbaem Healthcare Co on October 23, 2024 and sell it today you would earn a total of 3,000 from holding Chorokbaem Healthcare Co or generate 10.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chorokbaem Healthcare Co vs. SungMoon Electronics Co
Performance |
| Timeline |
| Chorokbaem Healthcare |
| SungMoon Electronics |
Chorokbaem Healthcare and SungMoon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chorokbaem Healthcare and SungMoon Electronics
The main advantage of trading using opposite Chorokbaem Healthcare and SungMoon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chorokbaem Healthcare 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.| Chorokbaem Healthcare vs. Samsung Electronics Co | Chorokbaem Healthcare vs. Samsung Electronics Co | Chorokbaem Healthcare vs. Hyundai Motor Co | Chorokbaem Healthcare vs. Hyundai Motor 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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