Correlation Between Jeju Beer and Sungchang Autotech
Can any of the company-specific risk be diversified away by investing in both Jeju Beer and Sungchang Autotech 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 Jeju Beer and Sungchang Autotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeju Beer Co and Sungchang Autotech Co, you can compare the effects of market volatilities on Jeju Beer and Sungchang Autotech 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 Jeju Beer with a short position of Sungchang Autotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Beer and Sungchang Autotech.
Diversification Opportunities for Jeju Beer and Sungchang Autotech
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Jeju and Sungchang is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Beer Co and Sungchang Autotech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungchang Autotech and Jeju Beer 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 Jeju Beer Co are associated (or correlated) with Sungchang Autotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungchang Autotech has no effect on the direction of Jeju Beer i.e., Jeju Beer and Sungchang Autotech go up and down completely randomly.
Pair Corralation between Jeju Beer and Sungchang Autotech
Assuming the 90 days trading horizon Jeju Beer Co is expected to under-perform the Sungchang Autotech. In addition to that, Jeju Beer is 2.08 times more volatile than Sungchang Autotech Co. It trades about -0.06 of its total potential returns per unit of risk. Sungchang Autotech Co is currently generating about -0.04 per unit of volatility. If you would invest 462,000 in Sungchang Autotech Co on September 3, 2024 and sell it today you would lose (77,500) from holding Sungchang Autotech Co or give up 16.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Beer Co vs. Sungchang Autotech Co
Performance |
| Timeline |
| Jeju Beer |
| Sungchang Autotech |
Jeju Beer and Sungchang Autotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Beer and Sungchang Autotech
The main advantage of trading using opposite Jeju Beer and Sungchang Autotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Beer position performs unexpectedly, Sungchang Autotech 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 Sungchang Autotech will offset losses from the drop in Sungchang Autotech's long position.| Jeju Beer vs. AptaBio Therapeutics | Jeju Beer vs. Daewoo SBI SPAC | Jeju Beer vs. Dream Security co | Jeju Beer vs. Microfriend |
| Sungchang Autotech vs. Korea Real Estate | Sungchang Autotech vs. Busan Industrial Co | Sungchang Autotech vs. UNISEM Co | Sungchang Autotech vs. RPBio Inc |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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