Correlation Between Seah Steel and Korea Alcohol
Can any of the company-specific risk be diversified away by investing in both Seah Steel and Korea Alcohol 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 Korea Alcohol 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 Korea Alcohol Industrial, you can compare the effects of market volatilities on Seah Steel and Korea Alcohol 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 Korea Alcohol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seah Steel and Korea Alcohol.
Diversification Opportunities for Seah Steel and Korea Alcohol
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Seah and Korea is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Seah Steel Corp and Korea Alcohol Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Alcohol Industrial 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 Korea Alcohol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Alcohol Industrial has no effect on the direction of Seah Steel i.e., Seah Steel and Korea Alcohol go up and down completely randomly.
Pair Corralation between Seah Steel and Korea Alcohol
Assuming the 90 days trading horizon Seah Steel Corp is expected to generate 1.18 times more return on investment than Korea Alcohol. However, Seah Steel is 1.18 times more volatile than Korea Alcohol Industrial. It trades about 0.02 of its potential returns per unit of risk. Korea Alcohol Industrial is currently generating about 0.0 per unit of risk. If you would invest 16,082,000 in Seah Steel Corp on August 27, 2024 and sell it today you would earn a total of 1,398,000 from holding Seah Steel Corp or generate 8.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seah Steel Corp vs. Korea Alcohol Industrial
Performance |
| Timeline |
| Seah Steel Corp |
| Korea Alcohol Industrial |
Seah Steel and Korea Alcohol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seah Steel and Korea Alcohol
The main advantage of trading using opposite Seah Steel and Korea Alcohol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seah Steel position performs unexpectedly, Korea Alcohol 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 Korea Alcohol will offset losses from the drop in Korea Alcohol's long position.| Seah Steel vs. LAKE MATERIALS LTD | Seah Steel vs. Daejoo Electronic Materials | Seah Steel vs. Daiyang Metal Co | Seah Steel vs. Hyundai Industrial Co |
| Korea Alcohol vs. LG Chemicals | Korea Alcohol vs. Lotte Chemical Corp | Korea Alcohol vs. Hyundai Steel | Korea Alcohol vs. Seah Steel Corp |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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