Correlation Between Korea Steel and Sewoon Medical
Can any of the company-specific risk be diversified away by investing in both Korea Steel and Sewoon Medical 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 Korea Steel and Sewoon Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Steel Co and Sewoon Medical Co, you can compare the effects of market volatilities on Korea Steel and Sewoon Medical 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 Korea Steel with a short position of Sewoon Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Steel and Sewoon Medical.
Diversification Opportunities for Korea Steel and Sewoon Medical
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Korea and Sewoon is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Korea Steel Co and Sewoon Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sewoon Medical and Korea Steel 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 Korea Steel Co are associated (or correlated) with Sewoon Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sewoon Medical has no effect on the direction of Korea Steel i.e., Korea Steel and Sewoon Medical go up and down completely randomly.
Pair Corralation between Korea Steel and Sewoon Medical
Assuming the 90 days trading horizon Korea Steel Co is expected to generate 1.23 times more return on investment than Sewoon Medical. However, Korea Steel is 1.23 times more volatile than Sewoon Medical Co. It trades about 0.06 of its potential returns per unit of risk. Sewoon Medical Co is currently generating about -0.05 per unit of risk. If you would invest 153,300 in Korea Steel Co on October 26, 2024 and sell it today you would earn a total of 11,400 from holding Korea Steel Co or generate 7.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Steel Co vs. Sewoon Medical Co
Performance |
| Timeline |
| Korea Steel |
| Sewoon Medical |
Korea Steel and Sewoon Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Steel and Sewoon Medical
The main advantage of trading using opposite Korea Steel and Sewoon Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Steel position performs unexpectedly, Sewoon Medical 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 Sewoon Medical will offset losses from the drop in Sewoon Medical's long position.| Korea Steel vs. Automobile Pc | Korea Steel vs. Lotte Non Life Insurance | Korea Steel vs. Samsung Life Insurance | Korea Steel vs. Nice Information Telecommunication |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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