Correlation Between HJ ShipBuilding and Sungchang Autotech

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

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

Diversification Opportunities for HJ ShipBuilding and Sungchang Autotech

-0.55

Correlation Coefficient

HJ ShipBuilding  Sungchang Autotech

Excellent diversification

The 3 months correlation between 097230 and Sungchang is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding HJ ShipBuilding Construction and Sungchang Autotech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungchang Autotech and HJ ShipBuilding 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 HJ ShipBuilding Construction are associated (or correlated) with Sungchang Autotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungchang Autotech has no effect on the direction of HJ ShipBuilding i.e., HJ ShipBuilding and Sungchang Autotech go up and down completely randomly.

Pair Corralation between HJ ShipBuilding and Sungchang Autotech

Assuming the 90 days trading horizon HJ ShipBuilding Construction is expected to generate 1.86 times more return on investment than Sungchang Autotech. However, HJ ShipBuilding is 1.86 times more volatile than Sungchang Autotech Co. It trades about 0.18 of its potential returns per unit of risk. Sungchang Autotech Co is currently generating about -0.06 per unit of risk. If you would invest  296,500  in HJ ShipBuilding Construction on September 3, 2024 and sell it today you would earn a total of  159,000  from holding HJ ShipBuilding Construction or generate 53.63% return on investment over 90 days.

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

HJ ShipBuilding Construction  vs.  Sungchang Autotech Co

HJ ShipBuilding Cons

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HJ ShipBuilding Construction are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, HJ ShipBuilding sustained solid returns over the last few months and may actually be approaching a breakup point.

Sungchang Autotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sungchang Autotech Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with HJ ShipBuilding and Sungchang Autotech

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

The idea behind HJ ShipBuilding Construction and Sungchang Autotech 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.