Correlation Between Korea Refract and Seoul Electronics
Can any of the company-specific risk be diversified away by investing in both Korea Refract and Seoul Electronics 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 Refract and Seoul Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Refract and Seoul Electronics Telecom, you can compare the effects of market volatilities on Korea Refract and Seoul Electronics 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 Refract with a short position of Seoul Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Refract and Seoul Electronics.
Diversification Opportunities for Korea Refract and Seoul Electronics
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Korea and Seoul is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Korea Refract and Seoul Electronics Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Electronics Telecom and Korea Refract 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 Refract are associated (or correlated) with Seoul Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Electronics Telecom has no effect on the direction of Korea Refract i.e., Korea Refract and Seoul Electronics go up and down completely randomly.
Pair Corralation between Korea Refract and Seoul Electronics
Assuming the 90 days trading horizon Korea Refract is expected to under-perform the Seoul Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Korea Refract is 6.41 times less risky than Seoul Electronics. The stock trades about -0.16 of its potential returns per unit of risk. The Seoul Electronics Telecom is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 23,800 in Seoul Electronics Telecom on November 27, 2024 and sell it today you would earn a total of 2,600 from holding Seoul Electronics Telecom or generate 10.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Refract vs. Seoul Electronics Telecom
Performance |
| Timeline |
| Korea Refract |
| Seoul Electronics Telecom |
Korea Refract and Seoul Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Refract and Seoul Electronics
The main advantage of trading using opposite Korea Refract and Seoul Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Refract position performs unexpectedly, Seoul Electronics 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 Seoul Electronics will offset losses from the drop in Seoul Electronics' long position.| Korea Refract vs. Tae Kyung Chemical | Korea Refract vs. Korea Petro Chemical | Korea Refract vs. Infinitt Healthcare Co | Korea Refract vs. Kyeryong Construction Industrial |
| Seoul Electronics vs. Seoul Semiconductor Co | Seoul Electronics vs. Hanmi Semiconductor Co | Seoul Electronics vs. Tway Air Co | Seoul Electronics vs. Cloud Air CoLtd |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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