Correlation Between DAEDUCK ELECTRONICS and Sungmoon Electronics
Can any of the company-specific risk be diversified away by investing in both DAEDUCK 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 DAEDUCK 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 DAEDUCK ELECTRONICS CoLtd and Sungmoon Electronics Co, you can compare the effects of market volatilities on DAEDUCK 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 DAEDUCK ELECTRONICS with a short position of Sungmoon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAEDUCK ELECTRONICS and Sungmoon Electronics.
Diversification Opportunities for DAEDUCK ELECTRONICS and Sungmoon Electronics
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DAEDUCK and Sungmoon is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding DAEDUCK ELECTRONICS CoLtd and Sungmoon Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungmoon Electronics and DAEDUCK 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 DAEDUCK ELECTRONICS CoLtd 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 DAEDUCK ELECTRONICS i.e., DAEDUCK ELECTRONICS and Sungmoon Electronics go up and down completely randomly.
Pair Corralation between DAEDUCK ELECTRONICS and Sungmoon Electronics
Assuming the 90 days trading horizon DAEDUCK ELECTRONICS CoLtd is expected to generate 0.47 times more return on investment than Sungmoon Electronics. However, DAEDUCK ELECTRONICS CoLtd is 2.13 times less risky than Sungmoon Electronics. It trades about 0.03 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 798,000 in DAEDUCK ELECTRONICS CoLtd on October 26, 2024 and sell it today you would earn a total of 20,000 from holding DAEDUCK ELECTRONICS CoLtd or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAEDUCK ELECTRONICS CoLtd vs. Sungmoon Electronics Co
Performance |
| Timeline |
| DAEDUCK ELECTRONICS CoLtd |
| Sungmoon Electronics |
DAEDUCK ELECTRONICS and Sungmoon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DAEDUCK ELECTRONICS and Sungmoon Electronics
The main advantage of trading using opposite DAEDUCK ELECTRONICS and Sungmoon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAEDUCK 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.| DAEDUCK ELECTRONICS vs. CJ Seafood Corp | DAEDUCK ELECTRONICS vs. Industrial Bank | DAEDUCK ELECTRONICS vs. Dongil Metal Co | DAEDUCK ELECTRONICS vs. Sempio Foods Co |
| Sungmoon Electronics vs. Insung Information Co | Sungmoon Electronics vs. Keyang Electric Machinery | Sungmoon Electronics vs. INFINITT Healthcare Co | Sungmoon Electronics vs. Infinitt Healthcare 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |