Correlation Between Seoul Food and Neungyule Education
Can any of the company-specific risk be diversified away by investing in both Seoul Food and Neungyule Education 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 Neungyule Education 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 Neungyule Education, you can compare the effects of market volatilities on Seoul Food and Neungyule Education 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 Neungyule Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Food and Neungyule Education.
Diversification Opportunities for Seoul Food and Neungyule Education
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Seoul and Neungyule is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Food Industrial and Neungyule Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neungyule Education 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 Neungyule Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neungyule Education has no effect on the direction of Seoul Food i.e., Seoul Food and Neungyule Education go up and down completely randomly.
Pair Corralation between Seoul Food and Neungyule Education
Assuming the 90 days trading horizon Seoul Food Industrial is expected to generate 0.66 times more return on investment than Neungyule Education. However, Seoul Food Industrial is 1.52 times less risky than Neungyule Education. It trades about -0.1 of its potential returns per unit of risk. Neungyule Education is currently generating about -0.13 per unit of risk. If you would invest 15,500 in Seoul Food Industrial on September 3, 2024 and sell it today you would lose (600.00) from holding Seoul Food Industrial or give up 3.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoul Food Industrial vs. Neungyule Education
Performance |
| Timeline |
| Seoul Food Industrial |
| Neungyule Education |
Seoul Food and Neungyule Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Food and Neungyule Education
The main advantage of trading using opposite Seoul Food and Neungyule Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Food position performs unexpectedly, Neungyule Education 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 Neungyule Education will offset losses from the drop in Neungyule Education's long position.| Seoul Food vs. Neungyule Education | Seoul Food vs. Sangsin Energy Display | Seoul Food vs. FNC Entertainment Co | Seoul Food vs. SKONEC Entertainment Co |
| Neungyule Education vs. Korea Real Estate | Neungyule Education vs. Busan Industrial Co | Neungyule Education vs. UNISEM Co | Neungyule Education vs. RPBio Inc |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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