Correlation Between GS Engineering and Seah Steel
Can any of the company-specific risk be diversified away by investing in both GS Engineering and Seah Steel 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 GS Engineering and Seah Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GS Engineering Construction and Seah Steel Corp, you can compare the effects of market volatilities on GS Engineering and Seah Steel 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 GS Engineering with a short position of Seah Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of GS Engineering and Seah Steel.
Diversification Opportunities for GS Engineering and Seah Steel
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 006360 and Seah is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding GS Engineering Construction and Seah Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seah Steel Corp and GS Engineering 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 GS Engineering Construction are associated (or correlated) with Seah Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seah Steel Corp has no effect on the direction of GS Engineering i.e., GS Engineering and Seah Steel go up and down completely randomly.
Pair Corralation between GS Engineering and Seah Steel
Assuming the 90 days trading horizon GS Engineering Construction is expected to generate 1.08 times more return on investment than Seah Steel. However, GS Engineering is 1.08 times more volatile than Seah Steel Corp. It trades about 0.18 of its potential returns per unit of risk. Seah Steel Corp is currently generating about 0.05 per unit of risk. If you would invest 1,827,000 in GS Engineering Construction on August 29, 2024 and sell it today you would earn a total of 151,000 from holding GS Engineering Construction or generate 8.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GS Engineering Construction vs. Seah Steel Corp
Performance |
| Timeline |
| GS Engineering Const |
| Seah Steel Corp |
GS Engineering and Seah Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GS Engineering and Seah Steel
The main advantage of trading using opposite GS Engineering and Seah Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GS Engineering position performs unexpectedly, Seah Steel 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 Seah Steel will offset losses from the drop in Seah Steel's long position.| GS Engineering vs. AptaBio Therapeutics | GS Engineering vs. Daewoo SBI SPAC | GS Engineering vs. Dream Security co | GS Engineering vs. Microfriend |
| Seah Steel vs. Cuckoo Electronics Co | Seah Steel vs. KyungIn Electronics Co | Seah Steel vs. Genie Music | Seah Steel vs. Duksan Hi Metal |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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