Correlation Between Dragonfly and Sungwoo Techron

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

By analyzing existing cross correlation between Dragonfly GF Co and Sungwoo Techron CoLtd, you can compare the effects of market volatilities on Dragonfly and Sungwoo Techron 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 Dragonfly with a short position of Sungwoo Techron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dragonfly and Sungwoo Techron.

Diversification Opportunities for Dragonfly and Sungwoo Techron

-0.31

Correlation Coefficient

Dragonfly  Sungwoo Techron

Very good diversification

The 3 months correlation between Dragonfly and Sungwoo is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Dragonfly GF Co and Sungwoo Techron CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungwoo Techron CoLtd and Dragonfly 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 Dragonfly GF Co are associated (or correlated) with Sungwoo Techron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungwoo Techron CoLtd has no effect on the direction of Dragonfly i.e., Dragonfly and Sungwoo Techron go up and down completely randomly.

Pair Corralation between Dragonfly and Sungwoo Techron

Assuming the 90 days trading horizon Dragonfly GF Co is expected to under-perform the Sungwoo Techron. In addition to that, Dragonfly is 3.88 times more volatile than Sungwoo Techron CoLtd. It trades about -0.04 of its total potential returns per unit of risk. Sungwoo Techron CoLtd is currently generating about 0.12 per unit of volatility. If you would invest  250,490  in Sungwoo Techron CoLtd on December 26, 2024 and sell it today you would earn a total of  29,510  from holding Sungwoo Techron CoLtd or generate 11.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.25%
Values	Daily Returns

Dragonfly GF Co  vs.  Sungwoo Techron CoLtd

Dragonfly GF

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dragonfly GF Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Sungwoo Techron CoLtd

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sungwoo Techron CoLtd are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sungwoo Techron sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dragonfly and Sungwoo Techron

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

The idea behind Dragonfly GF Co and Sungwoo Techron CoLtd 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.