Correlation Between Formetal and Sungchang Autotech
Can any of the company-specific risk be diversified away by investing in both Formetal 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 Formetal and Sungchang Autotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Formetal Co and Sungchang Autotech Co, you can compare the effects of market volatilities on Formetal 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 Formetal with a short position of Sungchang Autotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Formetal and Sungchang Autotech.
Diversification Opportunities for Formetal and Sungchang Autotech
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Formetal and Sungchang is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Formetal 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 Formetal 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 Formetal 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 Formetal i.e., Formetal and Sungchang Autotech go up and down completely randomly.
Pair Corralation between Formetal and Sungchang Autotech
Assuming the 90 days trading horizon Formetal Co is expected to generate 2.38 times more return on investment than Sungchang Autotech. However, Formetal is 2.38 times more volatile than Sungchang Autotech Co. It trades about 0.08 of its potential returns per unit of risk. Sungchang Autotech Co is currently generating about -0.05 per unit of risk. If you would invest 277,000 in Formetal Co on September 21, 2024 and sell it today you would earn a total of 19,500 from holding Formetal Co or generate 7.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Formetal Co vs. Sungchang Autotech Co
Performance |
| Timeline |
| Formetal |
| Sungchang Autotech |
Formetal and Sungchang Autotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Formetal and Sungchang Autotech
The main advantage of trading using opposite Formetal and Sungchang Autotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Formetal 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.| Formetal vs. Rainbow Robotics | Formetal vs. COWINTECH Co | Formetal vs. CS BEARING CoLtd | Formetal vs. Young Poong Precision |
| Sungchang Autotech vs. Duksan Hi Metal | Sungchang Autotech vs. Youngsin Metal Industrial | Sungchang Autotech vs. Heungkuk Metaltech CoLtd | Sungchang Autotech vs. Display Tech 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |