Correlation Between Seoul Food and Foodnamoo
Can any of the company-specific risk be diversified away by investing in both Seoul Food and Foodnamoo 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 Foodnamoo 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 Foodnamoo, you can compare the effects of market volatilities on Seoul Food and Foodnamoo 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 Foodnamoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Food and Foodnamoo.
Diversification Opportunities for Seoul Food and Foodnamoo
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seoul and Foodnamoo is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Food Industrial and Foodnamoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foodnamoo 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 Foodnamoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foodnamoo has no effect on the direction of Seoul Food i.e., Seoul Food and Foodnamoo go up and down completely randomly.
Pair Corralation between Seoul Food and Foodnamoo
Assuming the 90 days trading horizon Seoul Food Industrial is expected to generate 0.55 times more return on investment than Foodnamoo. However, Seoul Food Industrial is 1.82 times less risky than Foodnamoo. It trades about -0.12 of its potential returns per unit of risk. Foodnamoo is currently generating about -0.07 per unit of risk. If you would invest 15,600 in Seoul Food Industrial on September 2, 2024 and sell it today you would lose (700.00) from holding Seoul Food Industrial or give up 4.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoul Food Industrial vs. Foodnamoo
Performance |
| Timeline |
| Seoul Food Industrial |
| Foodnamoo |
Seoul Food and Foodnamoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Food and Foodnamoo
The main advantage of trading using opposite Seoul Food and Foodnamoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Food position performs unexpectedly, Foodnamoo 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 Foodnamoo will offset losses from the drop in Foodnamoo's long position.| Seoul Food vs. AptaBio Therapeutics | Seoul Food vs. Daewoo SBI SPAC | Seoul Food vs. Dream Security co | Seoul Food vs. Microfriend |
| Foodnamoo vs. Busan Industrial Co | Foodnamoo vs. Busan Ind | Foodnamoo vs. Mirae Asset Daewoo | Foodnamoo vs. Finebesteel |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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