Correlation Between SeAH Bestee and Dongwha Enterprise
Can any of the company-specific risk be diversified away by investing in both SeAH Bestee and Dongwha Enterprise 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 Dongwha Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SeAH Bestee and Dongwha Enterprise CoLtd, you can compare the effects of market volatilities on SeAH Bestee and Dongwha Enterprise 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 Dongwha Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of SeAH Bestee and Dongwha Enterprise.
Diversification Opportunities for SeAH Bestee and Dongwha Enterprise
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SeAH and Dongwha is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding SeAH Bestee and Dongwha Enterprise CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwha Enterprise CoLtd 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 Dongwha Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwha Enterprise CoLtd has no effect on the direction of SeAH Bestee i.e., SeAH Bestee and Dongwha Enterprise go up and down completely randomly.
Pair Corralation between SeAH Bestee and Dongwha Enterprise
Assuming the 90 days trading horizon SeAH Bestee is expected to generate 1.6 times more return on investment than Dongwha Enterprise. However, SeAH Bestee is 1.6 times more volatile than Dongwha Enterprise CoLtd. It trades about 0.15 of its potential returns per unit of risk. Dongwha Enterprise CoLtd is currently generating about -0.29 per unit of risk. If you would invest 1,926,000 in SeAH Bestee on September 4, 2024 and sell it today you would earn a total of 324,000 from holding SeAH Bestee or generate 16.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SeAH Bestee vs. Dongwha Enterprise CoLtd
Performance |
| Timeline |
| SeAH Bestee |
| Dongwha Enterprise CoLtd |
SeAH Bestee and Dongwha Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SeAH Bestee and Dongwha Enterprise
The main advantage of trading using opposite SeAH Bestee and Dongwha Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SeAH Bestee position performs unexpectedly, Dongwha Enterprise 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 Dongwha Enterprise will offset losses from the drop in Dongwha Enterprise'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 |
| Dongwha Enterprise vs. Ananti Inc | Dongwha Enterprise vs. InBody CoLtd | Dongwha Enterprise vs. Dongsin Engineering Construction | Dongwha Enterprise vs. LF Co |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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