Correlation Between SungMoon Electronics and Daelim Trading
Can any of the company-specific risk be diversified away by investing in both SungMoon Electronics and Daelim Trading 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 SungMoon Electronics and Daelim Trading into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SungMoon Electronics Co and Daelim Trading Co, you can compare the effects of market volatilities on SungMoon Electronics and Daelim Trading 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 SungMoon Electronics with a short position of Daelim Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of SungMoon Electronics and Daelim Trading.
Diversification Opportunities for SungMoon Electronics and Daelim Trading
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SungMoon and Daelim is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding SungMoon Electronics Co and Daelim Trading Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daelim Trading and SungMoon 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 SungMoon Electronics Co are associated (or correlated) with Daelim Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daelim Trading has no effect on the direction of SungMoon Electronics i.e., SungMoon Electronics and Daelim Trading go up and down completely randomly.
Pair Corralation between SungMoon Electronics and Daelim Trading
Assuming the 90 days trading horizon SungMoon Electronics Co is expected to under-perform the Daelim Trading. But the stock apears to be less risky and, when comparing its historical volatility, SungMoon Electronics Co is 1.34 times less risky than Daelim Trading. The stock trades about -0.12 of its potential returns per unit of risk. The Daelim Trading Co is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 292,500 in Daelim Trading Co on September 26, 2024 and sell it today you would lose (31,000) from holding Daelim Trading Co or give up 10.6% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SungMoon Electronics Co vs. Daelim Trading Co
Performance |
Timeline |
SungMoon Electronics |
Daelim Trading |
SungMoon Electronics and Daelim Trading Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SungMoon Electronics and Daelim Trading
The main advantage of trading using opposite SungMoon Electronics and Daelim Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SungMoon Electronics position performs unexpectedly, Daelim Trading 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 Daelim Trading will offset losses from the drop in Daelim Trading's long position.SungMoon Electronics vs. AptaBio Therapeutics | SungMoon Electronics vs. Wonbang Tech Co | SungMoon Electronics vs. Busan Industrial Co | SungMoon Electronics vs. Busan Ind |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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