Correlation Between Daiyang Metal and Seoyon Topmetal
Can any of the company-specific risk be diversified away by investing in both Daiyang Metal and Seoyon Topmetal 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 Daiyang Metal and Seoyon Topmetal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daiyang Metal Co and Seoyon Topmetal Co, you can compare the effects of market volatilities on Daiyang Metal and Seoyon Topmetal 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 Daiyang Metal with a short position of Seoyon Topmetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daiyang Metal and Seoyon Topmetal.
Diversification Opportunities for Daiyang Metal and Seoyon Topmetal
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daiyang and Seoyon is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Daiyang Metal Co and Seoyon Topmetal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoyon Topmetal and Daiyang Metal 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 Daiyang Metal Co are associated (or correlated) with Seoyon Topmetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoyon Topmetal has no effect on the direction of Daiyang Metal i.e., Daiyang Metal and Seoyon Topmetal go up and down completely randomly.
Pair Corralation between Daiyang Metal and Seoyon Topmetal
Assuming the 90 days trading horizon Daiyang Metal Co is expected to under-perform the Seoyon Topmetal. In addition to that, Daiyang Metal is 1.21 times more volatile than Seoyon Topmetal Co. It trades about -0.2 of its total potential returns per unit of risk. Seoyon Topmetal Co is currently generating about 0.06 per unit of volatility. If you would invest 363,500 in Seoyon Topmetal Co on August 29, 2024 and sell it today you would earn a total of 9,000 from holding Seoyon Topmetal Co or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daiyang Metal Co vs. Seoyon Topmetal Co
Performance |
| Timeline |
| Daiyang Metal |
| Seoyon Topmetal |
Daiyang Metal and Seoyon Topmetal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daiyang Metal and Seoyon Topmetal
The main advantage of trading using opposite Daiyang Metal and Seoyon Topmetal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daiyang Metal position performs unexpectedly, Seoyon Topmetal 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 Seoyon Topmetal will offset losses from the drop in Seoyon Topmetal's long position.| Daiyang Metal vs. SCI Information Service | Daiyang Metal vs. Hyosung Advanced Materials | Daiyang Metal vs. LS Materials | Daiyang Metal vs. System and Application |
| Seoyon Topmetal vs. Busan Industrial Co | Seoyon Topmetal vs. Busan Ind | Seoyon Topmetal vs. Mirae Asset Daewoo | Seoyon Topmetal vs. UNISEM 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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