Correlation Between Korea Refract and Sejong Telecom
Can any of the company-specific risk be diversified away by investing in both Korea Refract and Sejong Telecom 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 Sejong Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Refract and Sejong Telecom, you can compare the effects of market volatilities on Korea Refract and Sejong Telecom 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 Sejong Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Refract and Sejong Telecom.
Diversification Opportunities for Korea Refract and Sejong Telecom
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and Sejong is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Korea Refract and Sejong Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sejong 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 Sejong Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sejong Telecom has no effect on the direction of Korea Refract i.e., Korea Refract and Sejong Telecom go up and down completely randomly.
Pair Corralation between Korea Refract and Sejong Telecom
Assuming the 90 days trading horizon Korea Refract is expected to under-perform the Sejong Telecom. In addition to that, Korea Refract is 1.58 times more volatile than Sejong Telecom. It trades about -0.16 of its total potential returns per unit of risk. Sejong Telecom is currently generating about 0.29 per unit of volatility. If you would invest 41,400 in Sejong Telecom on November 27, 2024 and sell it today you would earn a total of 1,500 from holding Sejong Telecom or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Refract vs. Sejong Telecom
Performance |
| Timeline |
| Korea Refract |
| Sejong Telecom |
Korea Refract and Sejong Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Refract and Sejong Telecom
The main advantage of trading using opposite Korea Refract and Sejong Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Refract position performs unexpectedly, Sejong Telecom 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 Sejong Telecom will offset losses from the drop in Sejong Telecom's 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 |
| Sejong Telecom vs. Sam Chun Dang | Sejong Telecom vs. SAMRYOONG CoLtd | Sejong Telecom vs. BYON Co | Sejong Telecom vs. Sangsangin 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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