Correlation Between PanGen Biotech and SungMoon Electronics
Can any of the company-specific risk be diversified away by investing in both PanGen Biotech 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 PanGen Biotech and SungMoon Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PanGen Biotech and SungMoon Electronics Co, you can compare the effects of market volatilities on PanGen Biotech 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 PanGen Biotech with a short position of SungMoon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of PanGen Biotech and SungMoon Electronics.
Diversification Opportunities for PanGen Biotech and SungMoon Electronics
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between PanGen and SungMoon is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding PanGen Biotech and SungMoon Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SungMoon Electronics and PanGen Biotech 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 PanGen Biotech 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 PanGen Biotech i.e., PanGen Biotech and SungMoon Electronics go up and down completely randomly.
Pair Corralation between PanGen Biotech and SungMoon Electronics
Assuming the 90 days trading horizon PanGen Biotech is expected to generate 2.68 times more return on investment than SungMoon Electronics. However, PanGen Biotech is 2.68 times more volatile than SungMoon Electronics Co. It trades about 0.06 of its potential returns per unit of risk. SungMoon Electronics Co is currently generating about 0.03 per unit of risk. If you would invest 384,000 in PanGen Biotech on November 3, 2024 and sell it today you would earn a total of 84,000 from holding PanGen Biotech or generate 21.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PanGen Biotech vs. SungMoon Electronics Co
Performance |
| Timeline |
| PanGen Biotech |
| SungMoon Electronics |
PanGen Biotech and SungMoon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PanGen Biotech and SungMoon Electronics
The main advantage of trading using opposite PanGen Biotech and SungMoon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PanGen Biotech 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.| PanGen Biotech vs. Pyung Hwa Industrial | PanGen Biotech vs. TS Investment Corp | PanGen Biotech vs. Daol Investment Securities | PanGen Biotech vs. Coloray International Investment |
| SungMoon Electronics vs. Inzi Display CoLtd | SungMoon Electronics vs. Korea Air Svc | SungMoon Electronics vs. Playgram Co | SungMoon Electronics vs. Jeong Moon Information |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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