Correlation Between Sungwoo Techron and DataSolution
Can any of the company-specific risk be diversified away by investing in both Sungwoo Techron and DataSolution 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 Sungwoo Techron and DataSolution into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungwoo Techron CoLtd and DataSolution, you can compare the effects of market volatilities on Sungwoo Techron and DataSolution 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 Sungwoo Techron with a short position of DataSolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungwoo Techron and DataSolution.
Diversification Opportunities for Sungwoo Techron and DataSolution
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sungwoo and DataSolution is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sungwoo Techron CoLtd and DataSolution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DataSolution and Sungwoo Techron 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 Sungwoo Techron CoLtd are associated (or correlated) with DataSolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DataSolution has no effect on the direction of Sungwoo Techron i.e., Sungwoo Techron and DataSolution go up and down completely randomly.
Pair Corralation between Sungwoo Techron and DataSolution
Assuming the 90 days trading horizon Sungwoo Techron CoLtd is expected to generate 0.68 times more return on investment than DataSolution. However, Sungwoo Techron CoLtd is 1.47 times less risky than DataSolution. It trades about 0.1 of its potential returns per unit of risk. DataSolution is currently generating about 0.01 per unit of risk. If you would invest 252,000 in Sungwoo Techron CoLtd on December 28, 2024 and sell it today you would earn a total of 25,000 from holding Sungwoo Techron CoLtd or generate 9.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Sungwoo Techron CoLtd vs. DataSolution
Performance |
Timeline |
Sungwoo Techron CoLtd |
DataSolution |
Sungwoo Techron and DataSolution Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sungwoo Techron and DataSolution
The main advantage of trading using opposite Sungwoo Techron and DataSolution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungwoo Techron position performs unexpectedly, DataSolution 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 DataSolution will offset losses from the drop in DataSolution's long position.Sungwoo Techron vs. Kukdo Chemical Co | Sungwoo Techron vs. Kumho Petro Chemical | Sungwoo Techron vs. Isu Chemical Co | Sungwoo Techron vs. Kg Chemical |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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