Correlation Between Sungwoo Electronics and Samji Electronics

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

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

Diversification Opportunities for Sungwoo Electronics and Samji Electronics

-0.73

Correlation Coefficient

Sungwoo Electronics  Samji Electronics

Pay attention - limited upside

The 3 months correlation between Sungwoo and Samji is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Sungwoo Electronics Co and Samji Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samji Electronics and Sungwoo Electronics 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 Electronics Co are associated (or correlated) with Samji Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samji Electronics has no effect on the direction of Sungwoo Electronics i.e., Sungwoo Electronics and Samji Electronics go up and down completely randomly.

Pair Corralation between Sungwoo Electronics and Samji Electronics

Assuming the 90 days trading horizon Sungwoo Electronics is expected to generate 2.35 times less return on investment than Samji Electronics. In addition to that, Sungwoo Electronics is 1.84 times more volatile than Samji Electronics Co. It trades about 0.01 of its total potential returns per unit of risk. Samji Electronics Co is currently generating about 0.04 per unit of volatility. If you would invest  786,795  in Samji Electronics Co on December 2, 2024 and sell it today you would earn a total of  219,205  from holding Samji Electronics Co or generate 27.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.78%
Values	Daily Returns

Sungwoo Electronics Co  vs.  Samji Electronics Co

Sungwoo Electronics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sungwoo Electronics 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.

Samji Electronics

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Samji Electronics Co are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samji Electronics sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sungwoo Electronics and Samji Electronics

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

The idea behind Sungwoo Electronics Co and Samji Electronics 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.