Correlation Between Daelim Trading and Seoam Machinery
Can any of the company-specific risk be diversified away by investing in both Daelim Trading and Seoam Machinery 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 Daelim Trading and Seoam Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daelim Trading Co and Seoam Machinery Industry, you can compare the effects of market volatilities on Daelim Trading and Seoam Machinery 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 Daelim Trading with a short position of Seoam Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daelim Trading and Seoam Machinery.
Diversification Opportunities for Daelim Trading and Seoam Machinery
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daelim and Seoam is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Daelim Trading Co and Seoam Machinery Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoam Machinery Industry and Daelim Trading 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 Daelim Trading Co are associated (or correlated) with Seoam Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoam Machinery Industry has no effect on the direction of Daelim Trading i.e., Daelim Trading and Seoam Machinery go up and down completely randomly.
Pair Corralation between Daelim Trading and Seoam Machinery
Assuming the 90 days trading horizon Daelim Trading Co is expected to generate 0.62 times more return on investment than Seoam Machinery. However, Daelim Trading Co is 1.61 times less risky than Seoam Machinery. It trades about 0.0 of its potential returns per unit of risk. Seoam Machinery Industry is currently generating about -0.02 per unit of risk. If you would invest 287,500 in Daelim Trading Co on September 3, 2024 and sell it today you would lose (10,000) from holding Daelim Trading Co or give up 3.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daelim Trading Co vs. Seoam Machinery Industry
Performance |
| Timeline |
| Daelim Trading |
| Seoam Machinery Industry |
Daelim Trading and Seoam Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daelim Trading and Seoam Machinery
The main advantage of trading using opposite Daelim Trading and Seoam Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daelim Trading position performs unexpectedly, Seoam Machinery 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 Seoam Machinery will offset losses from the drop in Seoam Machinery's long position.| Daelim Trading vs. Daishin Information Communications | Daelim Trading vs. Hana Financial | Daelim Trading vs. Automobile Pc | Daelim Trading vs. KakaoBank Corp |
| Seoam Machinery vs. KyungIn Electronics Co | Seoam Machinery vs. Dongbang Transport Logistics | Seoam Machinery vs. Hanjin Transportation Co | Seoam Machinery vs. Shinil Electronics Co |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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