Correlation Between Samyung Trading and Sungmoon Electronics
Can any of the company-specific risk be diversified away by investing in both Samyung Trading 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 Samyung Trading and Sungmoon Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samyung Trading Co and Sungmoon Electronics Co, you can compare the effects of market volatilities on Samyung Trading 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 Samyung Trading with a short position of Sungmoon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samyung Trading and Sungmoon Electronics.
Diversification Opportunities for Samyung Trading and Sungmoon Electronics
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samyung and Sungmoon is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Samyung Trading 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 Samyung Trading 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 Samyung Trading 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 Samyung Trading i.e., Samyung Trading and Sungmoon Electronics go up and down completely randomly.
Pair Corralation between Samyung Trading and Sungmoon Electronics
Assuming the 90 days trading horizon Samyung Trading Co is expected to generate 0.15 times more return on investment than Sungmoon Electronics. However, Samyung Trading Co is 6.47 times less risky than Sungmoon Electronics. It trades about 0.09 of its potential returns per unit of risk. Sungmoon Electronics Co is currently generating about -0.01 per unit of risk. If you would invest 1,269,000 in Samyung Trading Co on September 23, 2024 and sell it today you would earn a total of 36,000 from holding Samyung Trading Co or generate 2.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Samyung Trading Co vs. Sungmoon Electronics Co
Performance |
Timeline |
Samyung Trading |
Sungmoon Electronics |
Samyung Trading and Sungmoon Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samyung Trading and Sungmoon Electronics
The main advantage of trading using opposite Samyung Trading and Sungmoon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samyung Trading 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.Samyung Trading vs. Woorim Machinery Co | Samyung Trading vs. SEOJEON ELECTRIC MACHINERY | Samyung Trading vs. Shinsegae Information Communication | Samyung Trading vs. Mobileleader CoLtd |
Sungmoon Electronics vs. Samsung Electronics Co | Sungmoon Electronics vs. Seoul Electronics Telecom | Sungmoon Electronics vs. RFTech Co | Sungmoon Electronics vs. Amogreentech 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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