Correlation Between Seoul Food and Nature
Can any of the company-specific risk be diversified away by investing in both Seoul Food and Nature 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 Nature 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 Nature and Environment, you can compare the effects of market volatilities on Seoul Food and Nature 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 Nature. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Food and Nature.
Diversification Opportunities for Seoul Food and Nature
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Seoul and Nature is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Food Industrial and Nature and Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nature and Environment 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 Nature. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nature and Environment has no effect on the direction of Seoul Food i.e., Seoul Food and Nature go up and down completely randomly.
Pair Corralation between Seoul Food and Nature
Assuming the 90 days trading horizon Seoul Food Industrial is expected to generate 0.43 times more return on investment than Nature. However, Seoul Food Industrial is 2.35 times less risky than Nature. It trades about -0.08 of its potential returns per unit of risk. Nature and Environment is currently generating about -0.04 per unit of risk. If you would invest 22,200 in Seoul Food Industrial on September 4, 2024 and sell it today you would lose (7,400) from holding Seoul Food Industrial or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoul Food Industrial vs. Nature and Environment
Performance |
| Timeline |
| Seoul Food Industrial |
| Nature and Environment |
Seoul Food and Nature Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Food and Nature
The main advantage of trading using opposite Seoul Food and Nature positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Food position performs unexpectedly, Nature 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 Nature will offset losses from the drop in Nature's long position.| Seoul Food vs. DB Financial Investment | Seoul Food vs. NH Investment Securities | Seoul Food vs. Korea Investment Holdings | Seoul Food vs. TS Investment Corp |
| Nature vs. Kyung In Synthetic Corp | Nature vs. Pureun Mutual Savings | Nature vs. GS Retail Co | Nature vs. Hannong Chemicals |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |