Correlation Between Hugel and Sungmoon Electronics
Can any of the company-specific risk be diversified away by investing in both Hugel 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 Hugel and Sungmoon Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hugel Inc and Sungmoon Electronics Co, you can compare the effects of market volatilities on Hugel 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 Hugel with a short position of Sungmoon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hugel and Sungmoon Electronics.
Diversification Opportunities for Hugel and Sungmoon Electronics
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hugel and Sungmoon is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Hugel Inc and Sungmoon Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungmoon Electronics and Hugel 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 Hugel Inc 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 Hugel i.e., Hugel and Sungmoon Electronics go up and down completely randomly.
Pair Corralation between Hugel and Sungmoon Electronics
Assuming the 90 days trading horizon Hugel Inc is expected to generate 2.51 times more return on investment than Sungmoon Electronics. However, Hugel is 2.51 times more volatile than Sungmoon Electronics Co. It trades about -0.03 of its potential returns per unit of risk. Sungmoon Electronics Co is currently generating about -0.21 per unit of risk. If you would invest 27,300,000 in Hugel Inc on September 1, 2024 and sell it today you would lose (1,300,000) from holding Hugel Inc or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hugel Inc vs. Sungmoon Electronics Co
Performance |
| Timeline |
| Hugel Inc |
| Sungmoon Electronics |
Hugel and Sungmoon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hugel and Sungmoon Electronics
The main advantage of trading using opposite Hugel and Sungmoon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hugel 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.| Hugel vs. Hanmi Semiconductor Co | Hugel vs. EBEST Investment Securities | Hugel vs. Sangsangin Investment Securities | Hugel vs. Daol Investment Securities |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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