Correlation Between People Technology and SungMoon Electronics
Can any of the company-specific risk be diversified away by investing in both People Technology 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 People Technology and SungMoon Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between People Technology and SungMoon Electronics Co, you can compare the effects of market volatilities on People Technology 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 People Technology with a short position of SungMoon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of People Technology and SungMoon Electronics.
Diversification Opportunities for People Technology and SungMoon Electronics
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between People and SungMoon is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding People Technology and SungMoon Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SungMoon Electronics and People 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 People Technology 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 People Technology i.e., People Technology and SungMoon Electronics go up and down completely randomly.
Pair Corralation between People Technology and SungMoon Electronics
Assuming the 90 days trading horizon People Technology is expected to generate 2.96 times more return on investment than SungMoon Electronics. However, People Technology is 2.96 times more volatile than SungMoon Electronics Co. It trades about -0.1 of its potential returns per unit of risk. SungMoon Electronics Co is currently generating about -0.41 per unit of risk. If you would invest 5,120,000 in People Technology on August 25, 2024 and sell it today you would lose (480,000) from holding People Technology or give up 9.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
People Technology vs. SungMoon Electronics Co
Performance |
| Timeline |
| People Technology |
| SungMoon Electronics |
People Technology and SungMoon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with People Technology and SungMoon Electronics
The main advantage of trading using opposite People Technology and SungMoon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if People Technology 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.| People Technology vs. Woori Technology | People Technology vs. Lion Chemtech Co | People Technology vs. ABCO Electronics Co | People Technology vs. Korea Alcohol Industrial |
| SungMoon Electronics vs. AptaBio Therapeutics | SungMoon Electronics vs. Daewoo SBI SPAC | SungMoon Electronics vs. Dream Security co | SungMoon Electronics vs. Microfriend |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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