Correlation Between Seoul Food and Daebo Magnetic
Can any of the company-specific risk be diversified away by investing in both Seoul Food and Daebo Magnetic 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 Daebo Magnetic 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 Daebo Magnetic CoLtd, you can compare the effects of market volatilities on Seoul Food and Daebo Magnetic 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 Daebo Magnetic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Food and Daebo Magnetic.
Diversification Opportunities for Seoul Food and Daebo Magnetic
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Seoul and Daebo is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Food Industrial and Daebo Magnetic CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daebo Magnetic CoLtd 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 Daebo Magnetic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daebo Magnetic CoLtd has no effect on the direction of Seoul Food i.e., Seoul Food and Daebo Magnetic go up and down completely randomly.
Pair Corralation between Seoul Food and Daebo Magnetic
Assuming the 90 days trading horizon Seoul Food Industrial is expected to generate 0.41 times more return on investment than Daebo Magnetic. However, Seoul Food Industrial is 2.47 times less risky than Daebo Magnetic. It trades about -0.04 of its potential returns per unit of risk. Daebo Magnetic CoLtd is currently generating about -0.08 per unit of risk. If you would invest 20,500 in Seoul Food Industrial on September 15, 2024 and sell it today you would lose (5,600) from holding Seoul Food Industrial or give up 27.32% 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. Daebo Magnetic CoLtd
Performance |
| Timeline |
| Seoul Food Industrial |
| Daebo Magnetic CoLtd |
Seoul Food and Daebo Magnetic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Food and Daebo Magnetic
The main advantage of trading using opposite Seoul Food and Daebo Magnetic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Food position performs unexpectedly, Daebo Magnetic 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 Daebo Magnetic will offset losses from the drop in Daebo Magnetic's long position.| Seoul Food vs. Hankukpackage Co | Seoul Food vs. InnoTherapy | Seoul Food vs. GS Engineering Construction | Seoul Food vs. INFINITT Healthcare Co |
| Daebo Magnetic vs. KT Submarine Telecom | Daebo Magnetic vs. Hansol Homedeco Co | Daebo Magnetic vs. CJ Seafood Corp | Daebo Magnetic vs. Seoul Food Industrial |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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