Correlation Between SeAH Besteel and GS Retail
Can any of the company-specific risk be diversified away by investing in both SeAH Besteel and GS Retail 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 Besteel and GS Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SeAH Besteel Corp and GS Retail Co, you can compare the effects of market volatilities on SeAH Besteel and GS Retail 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 Besteel with a short position of GS Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of SeAH Besteel and GS Retail.
Diversification Opportunities for SeAH Besteel and GS Retail
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SeAH and 007070 is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding SeAH Besteel Corp and GS Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Retail and SeAH Besteel 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 Besteel Corp are associated (or correlated) with GS Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Retail has no effect on the direction of SeAH Besteel i.e., SeAH Besteel and GS Retail go up and down completely randomly.
Pair Corralation between SeAH Besteel and GS Retail
Assuming the 90 days trading horizon SeAH Besteel Corp is expected to generate 0.78 times more return on investment than GS Retail. However, SeAH Besteel Corp is 1.28 times less risky than GS Retail. It trades about -0.22 of its potential returns per unit of risk. GS Retail Co is currently generating about -0.19 per unit of risk. If you would invest 2,400,000 in SeAH Besteel Corp on October 17, 2024 and sell it today you would lose (516,000) from holding SeAH Besteel Corp or give up 21.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 56.41% |
| Values | Daily Returns |
SeAH Besteel Corp vs. GS Retail Co
Performance |
| Timeline |
| SeAH Besteel Corp |
| GS Retail |
SeAH Besteel and GS Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SeAH Besteel and GS Retail
The main advantage of trading using opposite SeAH Besteel and GS Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SeAH Besteel position performs unexpectedly, GS Retail 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 GS Retail will offset losses from the drop in GS Retail's long position.| SeAH Besteel vs. AptaBio Therapeutics | SeAH Besteel vs. Daewoo SBI SPAC | SeAH Besteel vs. Dream Security co | SeAH Besteel vs. Microfriend |
| GS Retail vs. Iljin Display | GS Retail vs. SeAH Besteel Corp | GS Retail vs. BGF Retail Co | GS Retail vs. Dong A Steel 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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