Correlation Between SeAH Besteel and Company K
Can any of the company-specific risk be diversified away by investing in both SeAH Besteel and Company K 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 Company K 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 Company K Partners, you can compare the effects of market volatilities on SeAH Besteel and Company K 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 Company K. Check out your portfolio center. Please also check ongoing floating volatility patterns of SeAH Besteel and Company K.
Diversification Opportunities for SeAH Besteel and Company K
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between SeAH and Company is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding SeAH Besteel Corp and Company K Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Company K Partners 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 Company K. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Company K Partners has no effect on the direction of SeAH Besteel i.e., SeAH Besteel and Company K go up and down completely randomly.
Pair Corralation between SeAH Besteel and Company K
Assuming the 90 days trading horizon SeAH Besteel Corp is expected to under-perform the Company K. In addition to that, SeAH Besteel is 1.08 times more volatile than Company K Partners. It trades about -0.02 of its total potential returns per unit of risk. Company K Partners is currently generating about 0.03 per unit of volatility. If you would invest 494,000 in Company K Partners on October 25, 2024 and sell it today you would earn a total of 2,500 from holding Company K Partners or generate 0.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SeAH Besteel Corp vs. Company K Partners
Performance |
| Timeline |
| SeAH Besteel Corp |
| Company K Partners |
SeAH Besteel and Company K Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SeAH Besteel and Company K
The main advantage of trading using opposite SeAH Besteel and Company K positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SeAH Besteel position performs unexpectedly, Company K 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 Company K will offset losses from the drop in Company K'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 |
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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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