Correlation Between Ewon Comfortech and Sam Chun

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

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

Diversification Opportunities for Ewon Comfortech and Sam Chun

0.59

Correlation Coefficient

Ewon Comfortech  Sam Chun

Very weak diversification

The 3 months correlation between Ewon and Sam is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Ewon Comfortech Co and Sam Chun Dang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sam Chun Dang and Ewon Comfortech 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 Ewon Comfortech Co are associated (or correlated) with Sam Chun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sam Chun Dang has no effect on the direction of Ewon Comfortech i.e., Ewon Comfortech and Sam Chun go up and down completely randomly.

Pair Corralation between Ewon Comfortech and Sam Chun

Assuming the 90 days trading horizon Ewon Comfortech is expected to generate 8.93 times less return on investment than Sam Chun. But when comparing it to its historical volatility, Ewon Comfortech Co is 2.42 times less risky than Sam Chun. It trades about 0.05 of its potential returns per unit of risk. Sam Chun Dang is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  9,737,321  in Sam Chun Dang on December 4, 2024 and sell it today you would earn a total of  8,422,679  from holding Sam Chun Dang or generate 86.5% return on investment over 90 days.

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

Ewon Comfortech Co  vs.  Sam Chun Dang

Ewon Comfortech

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ewon Comfortech Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ewon Comfortech may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Sam Chun Dang

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sam Chun Dang are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sam Chun sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ewon Comfortech and Sam Chun

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

The idea behind Ewon Comfortech Co and Sam Chun Dang 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.