Correlation Between FoodNamoo and Sukgyung

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

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

Diversification Opportunities for FoodNamoo and Sukgyung

0.48

Correlation Coefficient

FoodNamoo  Sukgyung

Very weak diversification

The 3 months correlation between FoodNamoo and Sukgyung is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding FoodNamoo and Sukgyung AT Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sukgyung AT and FoodNamoo 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 FoodNamoo are associated (or correlated) with Sukgyung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sukgyung AT has no effect on the direction of FoodNamoo i.e., FoodNamoo and Sukgyung go up and down completely randomly.

Pair Corralation between FoodNamoo and Sukgyung

Assuming the 90 days trading horizon FoodNamoo is expected to under-perform the Sukgyung. In addition to that, FoodNamoo is 2.64 times more volatile than Sukgyung AT Co. It trades about -0.07 of its total potential returns per unit of risk. Sukgyung AT Co is currently generating about -0.13 per unit of volatility. If you would invest  4,565,000  in Sukgyung AT Co on September 2, 2024 and sell it today you would lose (590,000) from holding Sukgyung AT Co or give up 12.92% of portfolio value over 90 days.

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

FoodNamoo  vs.  Sukgyung AT Co

FoodNamoo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FoodNamoo 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.

Sukgyung AT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sukgyung AT 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.

Pair Trading with FoodNamoo and Sukgyung

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

The idea behind FoodNamoo and Sukgyung AT 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.