Correlation Between SungMoon Electronics and TS Investment
Can any of the company-specific risk be diversified away by investing in both SungMoon Electronics and TS Investment 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 TS Investment 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 TS Investment Corp, you can compare the effects of market volatilities on SungMoon Electronics and TS Investment 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 TS Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SungMoon Electronics and TS Investment.
Diversification Opportunities for SungMoon Electronics and TS Investment
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SungMoon and 246690 is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding SungMoon Electronics Co and TS Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TS Investment Corp 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 TS Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TS Investment Corp has no effect on the direction of SungMoon Electronics i.e., SungMoon Electronics and TS Investment go up and down completely randomly.
Pair Corralation between SungMoon Electronics and TS Investment
Assuming the 90 days trading horizon SungMoon Electronics Co is expected to under-perform the TS Investment. But the stock apears to be less risky and, when comparing its historical volatility, SungMoon Electronics Co is 1.88 times less risky than TS Investment. The stock trades about -0.09 of its potential returns per unit of risk. The TS Investment Corp is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 105,500 in TS Investment Corp on September 23, 2024 and sell it today you would lose (8,300) from holding TS Investment Corp or give up 7.87% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
SungMoon Electronics Co vs. TS Investment Corp
Performance |
Timeline |
SungMoon Electronics |
TS Investment Corp |
SungMoon Electronics and TS Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SungMoon Electronics and TS Investment
The main advantage of trading using opposite SungMoon Electronics and TS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SungMoon Electronics position performs unexpectedly, TS Investment 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 TS Investment will offset losses from the drop in TS Investment's long position.SungMoon Electronics vs. Eagon Industrial Co | SungMoon Electronics vs. InfoBank | SungMoon Electronics vs. Korean Reinsurance Co | SungMoon Electronics vs. Myoung Shin Industrial |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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