Correlation Between Soulbrain Holdings and Sung Kwang

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

By analyzing existing cross correlation between Soulbrain Holdings Co and Sung Kwang Bend, you can compare the effects of market volatilities on Soulbrain Holdings and Sung Kwang 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 Soulbrain Holdings with a short position of Sung Kwang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Soulbrain Holdings and Sung Kwang.

Diversification Opportunities for Soulbrain Holdings and Sung Kwang

-0.76

Correlation Coefficient

Soulbrain Holdings  Sung Kwang

Pay attention - limited upside

The 3 months correlation between Soulbrain and Sung is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Soulbrain Holdings Co and Sung Kwang Bend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sung Kwang Bend and Soulbrain Holdings 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 Soulbrain Holdings Co are associated (or correlated) with Sung Kwang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sung Kwang Bend has no effect on the direction of Soulbrain Holdings i.e., Soulbrain Holdings and Sung Kwang go up and down completely randomly.

Pair Corralation between Soulbrain Holdings and Sung Kwang

Assuming the 90 days trading horizon Soulbrain Holdings Co is expected to under-perform the Sung Kwang. In addition to that, Soulbrain Holdings is 1.33 times more volatile than Sung Kwang Bend. It trades about -0.01 of its total potential returns per unit of risk. Sung Kwang Bend is currently generating about 0.14 per unit of volatility. If you would invest  1,070,000  in Sung Kwang Bend on October 12, 2024 and sell it today you would earn a total of  1,415,000  from holding Sung Kwang Bend or generate 132.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Soulbrain Holdings Co  vs.  Sung Kwang Bend

Soulbrain Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Soulbrain Holdings 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Sung Kwang Bend

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sung Kwang Bend are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sung Kwang sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Soulbrain Holdings and Sung Kwang

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

The idea behind Soulbrain Holdings Co and Sung Kwang Bend 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.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.