Correlation Between Daehan Synthetic and Seohee Construction
Can any of the company-specific risk be diversified away by investing in both Daehan Synthetic and Seohee Construction 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 Daehan Synthetic and Seohee Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daehan Synthetic Fiber and Seohee Construction Co, you can compare the effects of market volatilities on Daehan Synthetic and Seohee Construction 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 Daehan Synthetic with a short position of Seohee Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daehan Synthetic and Seohee Construction.
Diversification Opportunities for Daehan Synthetic and Seohee Construction
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Daehan and Seohee is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Daehan Synthetic Fiber and Seohee Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seohee Construction and Daehan Synthetic 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 Daehan Synthetic Fiber are associated (or correlated) with Seohee Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seohee Construction has no effect on the direction of Daehan Synthetic i.e., Daehan Synthetic and Seohee Construction go up and down completely randomly.
Pair Corralation between Daehan Synthetic and Seohee Construction
Assuming the 90 days trading horizon Daehan Synthetic is expected to generate 12.28 times less return on investment than Seohee Construction. But when comparing it to its historical volatility, Daehan Synthetic Fiber is 1.27 times less risky than Seohee Construction. It trades about 0.0 of its potential returns per unit of risk. Seohee Construction Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 113,344 in Seohee Construction Co on September 2, 2024 and sell it today you would earn a total of 38,356 from holding Seohee Construction Co or generate 33.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daehan Synthetic Fiber vs. Seohee Construction Co
Performance |
| Timeline |
| Daehan Synthetic Fiber |
| Seohee Construction |
Daehan Synthetic and Seohee Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daehan Synthetic and Seohee Construction
The main advantage of trading using opposite Daehan Synthetic and Seohee Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daehan Synthetic position performs unexpectedly, Seohee Construction 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 Seohee Construction will offset losses from the drop in Seohee Construction's long position.| Daehan Synthetic vs. Shinsung Delta Tech | Daehan Synthetic vs. A Tech Solution Co | Daehan Synthetic vs. CU Medical Systems | Daehan Synthetic vs. Green Cross Medical |
| Seohee Construction vs. Korea New Network | Seohee Construction vs. ICD Co | Seohee Construction vs. DYPNF CoLtd | Seohee Construction vs. Busan Industrial 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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