Correlation Between Sung Bo and KyungIn Electronics
Can any of the company-specific risk be diversified away by investing in both Sung Bo and KyungIn 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 Sung Bo and KyungIn Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sung Bo Chemicals and KyungIn Electronics Co, you can compare the effects of market volatilities on Sung Bo and KyungIn 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 Sung Bo with a short position of KyungIn Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sung Bo and KyungIn Electronics.
Diversification Opportunities for Sung Bo and KyungIn Electronics
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sung and KyungIn is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Sung Bo Chemicals and KyungIn Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KyungIn Electronics and Sung Bo 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 Sung Bo Chemicals are associated (or correlated) with KyungIn Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KyungIn Electronics has no effect on the direction of Sung Bo i.e., Sung Bo and KyungIn Electronics go up and down completely randomly.
Pair Corralation between Sung Bo and KyungIn Electronics
Assuming the 90 days trading horizon Sung Bo Chemicals is expected to under-perform the KyungIn Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Sung Bo Chemicals is 1.28 times less risky than KyungIn Electronics. The stock trades about -0.11 of its potential returns per unit of risk. The KyungIn Electronics Co is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 2,130,000 in KyungIn Electronics Co on September 3, 2024 and sell it today you would lose (70,000) from holding KyungIn Electronics Co or give up 3.29% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sung Bo Chemicals vs. KyungIn Electronics Co
Performance |
Timeline |
Sung Bo Chemicals |
KyungIn Electronics |
Sung Bo and KyungIn Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sung Bo and KyungIn Electronics
The main advantage of trading using opposite Sung Bo and KyungIn Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sung Bo position performs unexpectedly, KyungIn 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 KyungIn Electronics will offset losses from the drop in KyungIn Electronics' long position.Sung Bo vs. Global Standard Technology | Sung Bo vs. Samsung Life Insurance | Sung Bo vs. Kakao Games Corp | Sung Bo vs. Dong A Steel Technology |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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