Correlation Between SFA Engineering and Sung Kwang

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

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

Diversification Opportunities for SFA Engineering and Sung Kwang

0.0

Correlation Coefficient

SFA Engineering  Sung Kwang

Pay attention - limited upside

The 3 months correlation between SFA and Sung is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SFA Engineering 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 SFA Engineering 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 SFA Engineering 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 SFA Engineering i.e., SFA Engineering and Sung Kwang go up and down completely randomly.

Pair Corralation between SFA Engineering and Sung Kwang

If you would invest  1,994,920  in SFA Engineering on December 21, 2024 and sell it today you would earn a total of  50,080  from holding SFA Engineering or generate 2.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

SFA Engineering  vs.  Sung Kwang Bend

SFA Engineering

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SFA Engineering are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, SFA Engineering is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sung Kwang Bend

Risk-Adjusted Performance

OK

Over the last 90 days Sung Kwang Bend has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Sung Kwang is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SFA Engineering and Sung Kwang

The main advantage of trading using opposite SFA Engineering and Sung Kwang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFA Engineering 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 SFA Engineering 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..