Correlation Between SKONEC Entertainment and SungMoon Electronics
Can any of the company-specific risk be diversified away by investing in both SKONEC Entertainment 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 SKONEC Entertainment and SungMoon Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SKONEC Entertainment Co and SungMoon Electronics Co, you can compare the effects of market volatilities on SKONEC Entertainment 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 SKONEC Entertainment with a short position of SungMoon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SKONEC Entertainment and SungMoon Electronics.
Diversification Opportunities for SKONEC Entertainment and SungMoon Electronics
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SKONEC and SungMoon is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding SKONEC Entertainment 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 SKONEC Entertainment 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 SKONEC Entertainment 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 SKONEC Entertainment i.e., SKONEC Entertainment and SungMoon Electronics go up and down completely randomly.
Pair Corralation between SKONEC Entertainment and SungMoon Electronics
Assuming the 90 days trading horizon SKONEC Entertainment Co is expected to under-perform the SungMoon Electronics. In addition to that, SKONEC Entertainment is 1.12 times more volatile than SungMoon Electronics Co. It trades about -0.05 of its total potential returns per unit of risk. SungMoon Electronics Co is currently generating about -0.01 per unit of volatility. If you would invest 173,909 in SungMoon Electronics Co on October 16, 2024 and sell it today you would lose (55,009) from holding SungMoon Electronics Co or give up 31.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SKONEC Entertainment Co vs. SungMoon Electronics Co
Performance |
| Timeline |
| SKONEC Entertainment |
| SungMoon Electronics |
SKONEC Entertainment and SungMoon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SKONEC Entertainment and SungMoon Electronics
The main advantage of trading using opposite SKONEC Entertainment and SungMoon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SKONEC Entertainment 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.| SKONEC Entertainment vs. Korean Air Lines | SKONEC Entertainment vs. Haitai Confectionery Foods | SKONEC Entertainment vs. Sempio Foods Co | SKONEC Entertainment vs. BGF Retail Co |
| SungMoon Electronics vs. Sungchang Autotech Co | SungMoon Electronics vs. PH Tech Co | SungMoon Electronics vs. DONGKUK TED METAL | SungMoon Electronics vs. Kbi Metal 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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