Correlation Between Seoul Food and COWINTECH
Can any of the company-specific risk be diversified away by investing in both Seoul Food and COWINTECH 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 COWINTECH 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 COWINTECH Co, you can compare the effects of market volatilities on Seoul Food and COWINTECH 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 COWINTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Food and COWINTECH.
Diversification Opportunities for Seoul Food and COWINTECH
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seoul and COWINTECH is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Food Industrial and COWINTECH Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COWINTECH 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 COWINTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COWINTECH has no effect on the direction of Seoul Food i.e., Seoul Food and COWINTECH go up and down completely randomly.
Pair Corralation between Seoul Food and COWINTECH
Assuming the 90 days trading horizon Seoul Food Industrial is expected to under-perform the COWINTECH. But the stock apears to be less risky and, when comparing its historical volatility, Seoul Food Industrial is 1.63 times less risky than COWINTECH. The stock trades about -0.03 of its potential returns per unit of risk. The COWINTECH Co is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,481,000 in COWINTECH Co on November 27, 2024 and sell it today you would earn a total of 153,000 from holding COWINTECH Co or generate 10.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoul Food Industrial vs. COWINTECH Co
Performance |
| Timeline |
| Seoul Food Industrial |
| COWINTECH |
Seoul Food and COWINTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Food and COWINTECH
The main advantage of trading using opposite Seoul Food and COWINTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Food position performs unexpectedly, COWINTECH 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 COWINTECH will offset losses from the drop in COWINTECH's long position.| Seoul Food vs. DB Financial Investment | Seoul Food vs. Samyung Trading Co | Seoul Food vs. Worldex Industry Trading | Seoul Food vs. Atinum Investment Co |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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