Correlation Between JC Chemical and Sung Bo
Can any of the company-specific risk be diversified away by investing in both JC Chemical 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 JC Chemical and Sung Bo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JC Chemical Co and Sung Bo Chemicals, you can compare the effects of market volatilities on JC Chemical 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 JC Chemical with a short position of Sung Bo. Check out your portfolio center. Please also check ongoing floating volatility patterns of JC Chemical and Sung Bo.
Diversification Opportunities for JC Chemical and Sung Bo
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 137950 and Sung is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding JC Chemical Co 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 JC Chemical 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 JC Chemical Co 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 JC Chemical i.e., JC Chemical and Sung Bo go up and down completely randomly.
Pair Corralation between JC Chemical and Sung Bo
Assuming the 90 days trading horizon JC Chemical Co is expected to under-perform the Sung Bo. In addition to that, JC Chemical is 2.5 times more volatile than Sung Bo Chemicals. It trades about -0.07 of its total potential returns per unit of risk. Sung Bo Chemicals is currently generating about -0.03 per unit of volatility. If you would invest 266,799 in Sung Bo Chemicals on October 26, 2024 and sell it today you would lose (13,799) from holding Sung Bo Chemicals or give up 5.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JC Chemical Co vs. Sung Bo Chemicals
Performance |
| Timeline |
| JC Chemical |
| Sung Bo Chemicals |
JC Chemical and Sung Bo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JC Chemical and Sung Bo
The main advantage of trading using opposite JC Chemical and Sung Bo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JC Chemical 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.| JC Chemical vs. Dongsin Engineering Construction | JC Chemical vs. Doosan Fuel Cell | JC Chemical vs. Daishin Balance 1 | JC Chemical vs. Total Soft Bank |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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