Correlation Between Kakao Games and Sungmoon Electronics
Can any of the company-specific risk be diversified away by investing in both Kakao Games 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 Kakao Games and Sungmoon Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kakao Games Corp and Sungmoon Electronics Co, you can compare the effects of market volatilities on Kakao Games 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 Kakao Games with a short position of Sungmoon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kakao Games and Sungmoon Electronics.
Diversification Opportunities for Kakao Games and Sungmoon Electronics
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kakao and Sungmoon is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Kakao Games Corp and Sungmoon Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungmoon Electronics and Kakao Games 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 Kakao Games Corp 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 Kakao Games i.e., Kakao Games and Sungmoon Electronics go up and down completely randomly.
Pair Corralation between Kakao Games and Sungmoon Electronics
Assuming the 90 days trading horizon Kakao Games Corp is expected to under-perform the Sungmoon Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Kakao Games Corp is 1.19 times less risky than Sungmoon Electronics. The stock trades about -0.02 of its potential returns per unit of risk. The Sungmoon Electronics Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 433,000 in Sungmoon Electronics Co on November 27, 2024 and sell it today you would earn a total of 21,500 from holding Sungmoon Electronics Co or generate 4.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.28% |
| Values | Daily Returns |
Kakao Games Corp vs. Sungmoon Electronics Co
Performance |
| Timeline |
| Kakao Games Corp |
| Sungmoon Electronics |
Kakao Games and Sungmoon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kakao Games and Sungmoon Electronics
The main advantage of trading using opposite Kakao Games and Sungmoon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kakao Games 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.| Kakao Games vs. Lotte Chilsung Beverage | Kakao Games vs. Air Busan Co | Kakao Games vs. Bohae Brewery | Kakao Games vs. Keum Kang Steel |
| Sungmoon Electronics vs. GS Retail Co | Sungmoon Electronics vs. EV Advanced Material | Sungmoon Electronics vs. Heungkuk Metaltech CoLtd | Sungmoon Electronics vs. BGF Retail 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |