Correlation Between Seoul Food and UNISEM
Can any of the company-specific risk be diversified away by investing in both Seoul Food and UNISEM 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 Seoul Food and UNISEM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seoul Food Industrial and UNISEM Co, you can compare the effects of market volatilities on Seoul Food and UNISEM 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 Seoul Food with a short position of UNISEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Food and UNISEM.
Diversification Opportunities for Seoul Food and UNISEM
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seoul and UNISEM is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Food Industrial and UNISEM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNISEM and Seoul Food 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 Seoul Food Industrial are associated (or correlated) with UNISEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNISEM has no effect on the direction of Seoul Food i.e., Seoul Food and UNISEM go up and down completely randomly.
Pair Corralation between Seoul Food and UNISEM
Assuming the 90 days trading horizon Seoul Food Industrial is expected to generate 0.63 times more return on investment than UNISEM. However, Seoul Food Industrial is 1.59 times less risky than UNISEM. It trades about 0.05 of its potential returns per unit of risk. UNISEM Co is currently generating about -0.27 per unit of risk. If you would invest 15,400 in Seoul Food Industrial on August 27, 2024 and sell it today you would earn a total of 200.00 from holding Seoul Food Industrial or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoul Food Industrial vs. UNISEM Co
Performance |
| Timeline |
| Seoul Food Industrial |
| UNISEM |
Seoul Food and UNISEM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Food and UNISEM
The main advantage of trading using opposite Seoul Food and UNISEM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Food position performs unexpectedly, UNISEM 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 UNISEM will offset losses from the drop in UNISEM's long position.| Seoul Food vs. Echomarketing CoLtd | Seoul Food vs. Daesung Hi Tech Co | Seoul Food vs. CG Hi Tech | Seoul Food vs. LG Display Co |
| UNISEM vs. Korea Real Estate | UNISEM vs. Korea Ratings Co | UNISEM vs. IQuest Co | UNISEM vs. Wonbang Tech 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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