Correlation Between Daeduck Electronics and Sung Bo

Can any of the company-specific risk be diversified away by investing in both Daeduck Electronics and Sung Bo 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 Sung Bo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Daeduck Electronics Co and Sung Bo Chemicals, you can compare the effects of market volatilities on Daeduck Electronics and Sung Bo 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 Sung Bo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daeduck Electronics and Sung Bo.

Diversification Opportunities for Daeduck Electronics and Sung Bo

0.35

Correlation Coefficient

Daeduck Electronics  Sung Bo

Weak diversification

The 3 months correlation between Daeduck and Sung is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Daeduck Electronics Co and Sung Bo Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sung Bo Chemicals 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 Co are associated (or correlated) with Sung Bo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sung Bo Chemicals has no effect on the direction of Daeduck Electronics i.e., Daeduck Electronics and Sung Bo go up and down completely randomly.

Pair Corralation between Daeduck Electronics and Sung Bo

Assuming the 90 days trading horizon Daeduck Electronics Co is expected to generate 0.94 times more return on investment than Sung Bo. However, Daeduck Electronics Co is 1.07 times less risky than Sung Bo. It trades about 0.12 of its potential returns per unit of risk. Sung Bo Chemicals is currently generating about 0.08 per unit of risk. If you would invest  667,000  in Daeduck Electronics Co on December 1, 2024 and sell it today you would earn a total of  38,000  from holding Daeduck Electronics Co or generate 5.7% 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 Co  vs.  Sung Bo Chemicals

Daeduck Electronics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Daeduck Electronics Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Daeduck Electronics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sung Bo Chemicals

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sung Bo Chemicals are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Sung Bo is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Daeduck Electronics and Sung Bo

The main advantage of trading using opposite Daeduck Electronics and Sung Bo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daeduck Electronics position performs unexpectedly, Sung Bo 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 Sung Bo will offset losses from the drop in Sung Bo's long position.

The idea behind Daeduck Electronics Co and Sung Bo Chemicals pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.