Correlation Between CU Medical and SungMoon Electronics
Can any of the company-specific risk be diversified away by investing in both CU Medical and SungMoon 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 CU Medical and SungMoon Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CU Medical Systems and SungMoon Electronics Co, you can compare the effects of market volatilities on CU Medical and SungMoon 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 CU Medical with a short position of SungMoon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of CU Medical and SungMoon Electronics.
Diversification Opportunities for CU Medical and SungMoon Electronics
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between 115480 and SungMoon is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding CU Medical Systems and SungMoon Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SungMoon Electronics and CU Medical 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 CU Medical Systems are associated (or correlated) with SungMoon Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SungMoon Electronics has no effect on the direction of CU Medical i.e., CU Medical and SungMoon Electronics go up and down completely randomly.
Pair Corralation between CU Medical and SungMoon Electronics
Assuming the 90 days trading horizon CU Medical Systems is expected to generate 0.95 times more return on investment than SungMoon Electronics. However, CU Medical Systems is 1.05 times less risky than SungMoon Electronics. It trades about -0.06 of its potential returns per unit of risk. SungMoon Electronics Co is currently generating about -0.1 per unit of risk. If you would invest 74,400 in CU Medical Systems on September 25, 2024 and sell it today you would lose (5,700) from holding CU Medical Systems or give up 7.66% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
CU Medical Systems vs. SungMoon Electronics Co
Performance |
Timeline |
CU Medical Systems |
SungMoon Electronics |
CU Medical and SungMoon Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CU Medical and SungMoon Electronics
The main advantage of trading using opposite CU Medical and SungMoon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CU Medical position performs unexpectedly, SungMoon 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 SungMoon Electronics will offset losses from the drop in SungMoon Electronics' long position.CU Medical vs. PJ Metal Co | CU Medical vs. Daiyang Metal Co | CU Medical vs. Daishin Information Communications | CU Medical vs. Kbi Metal Co |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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