Correlation Between Sungmoon Electronics and Hanjoo Light
Can any of the company-specific risk be diversified away by investing in both Sungmoon Electronics and Hanjoo Light 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 Hanjoo Light 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 Hanjoo Light Metal, you can compare the effects of market volatilities on Sungmoon Electronics and Hanjoo Light 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 Hanjoo Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungmoon Electronics and Hanjoo Light.
Diversification Opportunities for Sungmoon Electronics and Hanjoo Light
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sungmoon and Hanjoo is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Sungmoon Electronics Co and Hanjoo Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjoo Light Metal 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 Hanjoo Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjoo Light Metal has no effect on the direction of Sungmoon Electronics i.e., Sungmoon Electronics and Hanjoo Light go up and down completely randomly.
Pair Corralation between Sungmoon Electronics and Hanjoo Light
Assuming the 90 days trading horizon Sungmoon Electronics Co is expected to generate 2.5 times more return on investment than Hanjoo Light. However, Sungmoon Electronics is 2.5 times more volatile than Hanjoo Light Metal. It trades about 0.05 of its potential returns per unit of risk. Hanjoo Light Metal is currently generating about -0.24 per unit of risk. If you would invest 455,000 in Sungmoon Electronics Co on September 26, 2024 and sell it today you would earn a total of 12,000 from holding Sungmoon Electronics Co or generate 2.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Sungmoon Electronics Co vs. Hanjoo Light Metal
Performance |
Timeline |
Sungmoon Electronics |
Hanjoo Light Metal |
Sungmoon Electronics and Hanjoo Light Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sungmoon Electronics and Hanjoo Light
The main advantage of trading using opposite Sungmoon Electronics and Hanjoo Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungmoon Electronics position performs unexpectedly, Hanjoo Light 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 Hanjoo Light will offset losses from the drop in Hanjoo Light's long position.Sungmoon Electronics vs. Cuckoo Electronics Co | Sungmoon Electronics vs. Derkwoo Electronics Co | Sungmoon Electronics vs. Samsung Electronics Co | Sungmoon Electronics vs. Okins Electronics Co |
Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. LG Energy Solution | Hanjoo Light vs. SK Hynix |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |