Correlation Between JC Chemical and SungMoon Electronics
Can any of the company-specific risk be diversified away by investing in both JC Chemical 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 JC Chemical and SungMoon Electronics 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 SungMoon Electronics Co, you can compare the effects of market volatilities on JC Chemical 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 JC Chemical with a short position of SungMoon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of JC Chemical and SungMoon Electronics.
Diversification Opportunities for JC Chemical and SungMoon Electronics
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 137950 and SungMoon is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding JC Chemical 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 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 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 JC Chemical i.e., JC Chemical and SungMoon Electronics go up and down completely randomly.
Pair Corralation between JC Chemical and SungMoon Electronics
Assuming the 90 days trading horizon JC Chemical Co is expected to under-perform the SungMoon Electronics. But the stock apears to be less risky and, when comparing its historical volatility, JC Chemical Co is 1.03 times less risky than SungMoon Electronics. The stock trades about -0.07 of its potential returns per unit of risk. The SungMoon Electronics Co is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 220,252 in SungMoon Electronics Co on September 2, 2024 and sell it today you would lose (109,552) from holding SungMoon Electronics Co or give up 49.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JC Chemical Co vs. SungMoon Electronics Co
Performance |
| Timeline |
| JC Chemical |
| SungMoon Electronics |
JC Chemical and SungMoon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JC Chemical and SungMoon Electronics
The main advantage of trading using opposite JC Chemical and SungMoon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JC Chemical 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.| JC Chemical vs. Sejong Industrial | JC Chemical vs. Jin Air Co | JC Chemical vs. Korea Alcohol Industrial | JC Chemical vs. Seoyon Topmetal Co |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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