Correlation Between Seah Steel and Kukdong Oil
Can any of the company-specific risk be diversified away by investing in both Seah Steel and Kukdong Oil 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 Kukdong Oil 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 Kukdong Oil Chemicals, you can compare the effects of market volatilities on Seah Steel and Kukdong Oil 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 Kukdong Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seah Steel and Kukdong Oil.
Diversification Opportunities for Seah Steel and Kukdong Oil
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Seah and Kukdong is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Seah Steel Corp and Kukdong Oil Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukdong Oil Chemicals 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 Kukdong Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukdong Oil Chemicals has no effect on the direction of Seah Steel i.e., Seah Steel and Kukdong Oil go up and down completely randomly.
Pair Corralation between Seah Steel and Kukdong Oil
Assuming the 90 days trading horizon Seah Steel Corp is expected to generate 0.96 times more return on investment than Kukdong Oil. However, Seah Steel Corp is 1.04 times less risky than Kukdong Oil. It trades about 0.03 of its potential returns per unit of risk. Kukdong Oil Chemicals is currently generating about 0.01 per unit of risk. If you would invest 15,642,100 in Seah Steel Corp on September 12, 2024 and sell it today you would earn a total of 2,557,900 from holding Seah Steel Corp or generate 16.35% 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. Kukdong Oil Chemicals
Performance |
| Timeline |
| Seah Steel Corp |
| Kukdong Oil Chemicals |
Seah Steel and Kukdong Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seah Steel and Kukdong Oil
The main advantage of trading using opposite Seah Steel and Kukdong Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seah Steel position performs unexpectedly, Kukdong Oil 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 Kukdong Oil will offset losses from the drop in Kukdong Oil's long position.| Seah Steel vs. LG Chemicals | Seah Steel vs. POSCO Holdings | Seah Steel vs. Hanwha Solutions | Seah Steel vs. Lotte Chemical Corp |
| Kukdong Oil vs. Samsung Electronics Co | Kukdong Oil vs. Samsung Electronics Co | Kukdong Oil vs. SK Hynix | Kukdong Oil vs. POSCO Holdings |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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