Correlation Between SeAH Besteel and PI Advanced
Can any of the company-specific risk be diversified away by investing in both SeAH Besteel and PI Advanced 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 PI Advanced 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 PI Advanced Materials, you can compare the effects of market volatilities on SeAH Besteel and PI Advanced 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 PI Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of SeAH Besteel and PI Advanced.
Diversification Opportunities for SeAH Besteel and PI Advanced
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SeAH and 178920 is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding SeAH Besteel Corp and PI Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PI Advanced Materials 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 PI Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PI Advanced Materials has no effect on the direction of SeAH Besteel i.e., SeAH Besteel and PI Advanced go up and down completely randomly.
Pair Corralation between SeAH Besteel and PI Advanced
Assuming the 90 days trading horizon SeAH Besteel Corp is expected to generate 1.01 times more return on investment than PI Advanced. However, SeAH Besteel is 1.01 times more volatile than PI Advanced Materials. It trades about 0.02 of its potential returns per unit of risk. PI Advanced Materials is currently generating about -0.03 per unit of risk. If you would invest 1,976,000 in SeAH Besteel Corp on October 29, 2024 and sell it today you would lose (2,000) from holding SeAH Besteel Corp or give up 0.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SeAH Besteel Corp vs. PI Advanced Materials
Performance |
| Timeline |
| SeAH Besteel Corp |
| PI Advanced Materials |
SeAH Besteel and PI Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SeAH Besteel and PI Advanced
The main advantage of trading using opposite SeAH Besteel and PI Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SeAH Besteel position performs unexpectedly, PI Advanced 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 PI Advanced will offset losses from the drop in PI Advanced's long position.| SeAH Besteel vs. KB Financial Group | SeAH Besteel vs. Shinhan Financial Group | SeAH Besteel vs. Hana Financial | SeAH Besteel vs. Woori Financial Group |
| PI Advanced vs. LS Materials | PI Advanced vs. INNOX Advanced Materials | PI Advanced vs. Barunson Entertainment Arts | PI Advanced vs. Kolon Plastics |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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