Correlation Between Cuckoo Electronics and SungMoon Electronics
Can any of the company-specific risk be diversified away by investing in both Cuckoo Electronics 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 Cuckoo Electronics and SungMoon Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cuckoo Electronics Co and SungMoon Electronics Co, you can compare the effects of market volatilities on Cuckoo Electronics 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 Cuckoo Electronics with a short position of SungMoon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cuckoo Electronics and SungMoon Electronics.
Diversification Opportunities for Cuckoo Electronics and SungMoon Electronics
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cuckoo and SungMoon is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Cuckoo Electronics 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 Cuckoo Electronics 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 Cuckoo Electronics 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 Cuckoo Electronics i.e., Cuckoo Electronics and SungMoon Electronics go up and down completely randomly.
Pair Corralation between Cuckoo Electronics and SungMoon Electronics
Assuming the 90 days trading horizon Cuckoo Electronics is expected to generate 18.9 times less return on investment than SungMoon Electronics. But when comparing it to its historical volatility, Cuckoo Electronics Co is 4.32 times less risky than SungMoon Electronics. It trades about 0.05 of its potential returns per unit of risk. SungMoon Electronics Co is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 112,000 in SungMoon Electronics Co on November 9, 2024 and sell it today you would earn a total of 9,700 from holding SungMoon Electronics Co or generate 8.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cuckoo Electronics Co vs. SungMoon Electronics Co
Performance |
| Timeline |
| Cuckoo Electronics |
| SungMoon Electronics |
Cuckoo Electronics and SungMoon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cuckoo Electronics and SungMoon Electronics
The main advantage of trading using opposite Cuckoo Electronics and SungMoon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cuckoo Electronics 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.| Cuckoo Electronics vs. Jin Air Co | Cuckoo Electronics vs. Cloud Air CoLtd | Cuckoo Electronics vs. Lotte Chilsung Beverage | Cuckoo Electronics vs. Sempio Foods Co |
| SungMoon Electronics vs. Youngbo Chemical Co | SungMoon Electronics vs. Kukdong Oil Chemicals | SungMoon Electronics vs. Tae Kyung Chemical | SungMoon Electronics vs. Songwon Industrial 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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