Correlation Between Sungmoon Electronics and Samyung Trading
Can any of the company-specific risk be diversified away by investing in both Sungmoon Electronics and Samyung Trading 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 Sungmoon Electronics and Samyung Trading into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungmoon Electronics Co and Samyung Trading Co, you can compare the effects of market volatilities on Sungmoon Electronics and Samyung Trading 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 Sungmoon Electronics with a short position of Samyung Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungmoon Electronics and Samyung Trading.
Diversification Opportunities for Sungmoon Electronics and Samyung Trading
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sungmoon and Samyung is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Sungmoon Electronics Co and Samyung Trading Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samyung Trading and Sungmoon 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 Sungmoon Electronics Co are associated (or correlated) with Samyung Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samyung Trading has no effect on the direction of Sungmoon Electronics i.e., Sungmoon Electronics and Samyung Trading go up and down completely randomly.
Pair Corralation between Sungmoon Electronics and Samyung Trading
Assuming the 90 days trading horizon Sungmoon Electronics Co is expected to under-perform the Samyung Trading. In addition to that, Sungmoon Electronics is 6.47 times more volatile than Samyung Trading Co. It trades about -0.01 of its total potential returns per unit of risk. Samyung Trading Co is currently generating about 0.09 per unit of volatility. 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 |
Sungmoon Electronics Co vs. Samyung Trading Co
Performance |
Timeline |
Sungmoon Electronics |
Samyung Trading |
Sungmoon Electronics and Samyung Trading Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sungmoon Electronics and Samyung Trading
The main advantage of trading using opposite Sungmoon Electronics and Samyung Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungmoon Electronics position performs unexpectedly, Samyung Trading 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 Samyung Trading will offset losses from the drop in Samyung Trading's long position.Sungmoon Electronics vs. Samsung Electronics Co | Sungmoon Electronics vs. Seoul Electronics Telecom | Sungmoon Electronics vs. RFTech Co | Sungmoon Electronics vs. Amogreentech Co |
Samyung Trading vs. Woorim Machinery Co | Samyung Trading vs. SEOJEON ELECTRIC MACHINERY | Samyung Trading vs. Shinsegae Information Communication | Samyung Trading vs. Mobileleader CoLtd |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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