Correlation Between SeAH Bestee and KPX Chemical
Can any of the company-specific risk be diversified away by investing in both SeAH Bestee and KPX Chemical 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 SeAH Bestee and KPX Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SeAH Bestee and KPX Chemical, you can compare the effects of market volatilities on SeAH Bestee and KPX Chemical 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 SeAH Bestee with a short position of KPX Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of SeAH Bestee and KPX Chemical.
Diversification Opportunities for SeAH Bestee and KPX Chemical
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SeAH and KPX is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding SeAH Bestee and KPX Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KPX Chemical and SeAH Bestee 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 SeAH Bestee are associated (or correlated) with KPX Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KPX Chemical has no effect on the direction of SeAH Bestee i.e., SeAH Bestee and KPX Chemical go up and down completely randomly.
Pair Corralation between SeAH Bestee and KPX Chemical
Assuming the 90 days trading horizon SeAH Bestee is expected to generate 3.95 times more return on investment than KPX Chemical. However, SeAH Bestee is 3.95 times more volatile than KPX Chemical. It trades about 0.03 of its potential returns per unit of risk. KPX Chemical is currently generating about 0.0 per unit of risk. If you would invest 1,712,381 in SeAH Bestee on September 4, 2024 and sell it today you would earn a total of 537,619 from holding SeAH Bestee or generate 31.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SeAH Bestee vs. KPX Chemical
Performance |
| Timeline |
| SeAH Bestee |
| KPX Chemical |
SeAH Bestee and KPX Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SeAH Bestee and KPX Chemical
The main advantage of trading using opposite SeAH Bestee and KPX Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SeAH Bestee position performs unexpectedly, KPX Chemical 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 KPX Chemical will offset losses from the drop in KPX Chemical's long position.| SeAH Bestee vs. Nable Communications | SeAH Bestee vs. Shinsegae Information Communication | SeAH Bestee vs. Sungchang Autotech Co | SeAH Bestee vs. PH Tech Co |
| KPX Chemical vs. Shinsung Delta Tech | KPX Chemical vs. SS TECH | KPX Chemical vs. Vitzro Tech Co | KPX Chemical vs. Woori Technology |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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