Correlation Between Seah Steel and Dongjin Semichem
Can any of the company-specific risk be diversified away by investing in both Seah Steel and Dongjin Semichem 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 Steel and Dongjin Semichem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seah Steel Corp and Dongjin Semichem Co, you can compare the effects of market volatilities on Seah Steel and Dongjin Semichem 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 Steel with a short position of Dongjin Semichem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seah Steel and Dongjin Semichem.
Diversification Opportunities for Seah Steel and Dongjin Semichem
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Seah and Dongjin is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Seah Steel Corp and Dongjin Semichem Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongjin Semichem and Seah Steel 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 Steel Corp are associated (or correlated) with Dongjin Semichem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongjin Semichem has no effect on the direction of Seah Steel i.e., Seah Steel and Dongjin Semichem go up and down completely randomly.
Pair Corralation between Seah Steel and Dongjin Semichem
Assuming the 90 days trading horizon Seah Steel Corp is expected to generate 0.96 times more return on investment than Dongjin Semichem. However, Seah Steel Corp is 1.04 times less risky than Dongjin Semichem. It trades about 0.02 of its potential returns per unit of risk. Dongjin Semichem Co is currently generating about -0.01 per unit of risk. If you would invest 15,642,100 in Seah Steel Corp on August 29, 2024 and sell it today you would earn a total of 1,657,900 from holding Seah Steel Corp or generate 10.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seah Steel Corp vs. Dongjin Semichem Co
Performance |
| Timeline |
| Seah Steel Corp |
| Dongjin Semichem |
Seah Steel and Dongjin Semichem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seah Steel and Dongjin Semichem
The main advantage of trading using opposite Seah Steel and Dongjin Semichem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seah Steel position performs unexpectedly, Dongjin Semichem 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 Dongjin Semichem will offset losses from the drop in Dongjin Semichem's long position.| Seah Steel vs. LB Investment | Seah Steel vs. Polaris Office Corp | Seah Steel vs. Wireless Power Amplifier | Seah Steel vs. SBI Investment KOREA |
| Dongjin Semichem vs. Wonik Ips Co | Dongjin Semichem vs. Nepes | Dongjin Semichem vs. LEENO Industrial | Dongjin Semichem 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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