Correlation Between Sungchang Autotech and Playgram

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

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

Diversification Opportunities for Sungchang Autotech and Playgram

0.01

Correlation Coefficient

Sungchang Autotech  Playgram

Significant diversification

The 3 months correlation between Sungchang and Playgram is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sungchang Autotech Co and Playgram Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playgram and Sungchang Autotech 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 Sungchang Autotech Co are associated (or correlated) with Playgram. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playgram has no effect on the direction of Sungchang Autotech i.e., Sungchang Autotech and Playgram go up and down completely randomly.

Pair Corralation between Sungchang Autotech and Playgram

Assuming the 90 days trading horizon Sungchang Autotech Co is expected to under-perform the Playgram. But the stock apears to be less risky and, when comparing its historical volatility, Sungchang Autotech Co is 2.26 times less risky than Playgram. The stock trades about -0.06 of its potential returns per unit of risk. The Playgram Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  77,600  in Playgram Co on September 28, 2024 and sell it today you would lose (42,300) from holding Playgram Co or give up 54.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Sungchang Autotech Co  vs.  Playgram Co

Sungchang Autotech

Risk-Adjusted Performance

0 of 100

Very Weak

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

Playgram

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Playgram Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Playgram may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Sungchang Autotech and Playgram

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

The idea behind Sungchang Autotech Co and Playgram Co 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.