Correlation Between SEOHAN Const and EE HWA
Can any of the company-specific risk be diversified away by investing in both SEOHAN Const and EE HWA 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 SEOHAN Const and EE HWA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEOHAN Const EngcoLtd and EE HWA Construction Co, you can compare the effects of market volatilities on SEOHAN Const and EE HWA 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 SEOHAN Const with a short position of EE HWA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEOHAN Const and EE HWA.
Diversification Opportunities for SEOHAN Const and EE HWA
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SEOHAN and 001840 is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding SEOHAN Const EngcoLtd and EE HWA Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EE HWA Construction and SEOHAN Const 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 SEOHAN Const EngcoLtd are associated (or correlated) with EE HWA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EE HWA Construction has no effect on the direction of SEOHAN Const i.e., SEOHAN Const and EE HWA go up and down completely randomly.
Pair Corralation between SEOHAN Const and EE HWA
Assuming the 90 days trading horizon SEOHAN Const EngcoLtd is expected to under-perform the EE HWA. But the stock apears to be less risky and, when comparing its historical volatility, SEOHAN Const EngcoLtd is 2.69 times less risky than EE HWA. The stock trades about -0.05 of its potential returns per unit of risk. The EE HWA Construction Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 476,000 in EE HWA Construction Co on August 24, 2024 and sell it today you would lose (198,000) from holding EE HWA Construction Co or give up 41.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEOHAN Const EngcoLtd vs. EE HWA Construction Co
Performance |
| Timeline |
| SEOHAN Const EngcoLtd |
| EE HWA Construction |
SEOHAN Const and EE HWA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEOHAN Const and EE HWA
The main advantage of trading using opposite SEOHAN Const and EE HWA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEOHAN Const position performs unexpectedly, EE HWA 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 EE HWA will offset losses from the drop in EE HWA's long position.| SEOHAN Const vs. Hanyang ENG Co | SEOHAN Const vs. Nam Hwa Construction | SEOHAN Const vs. KT Submarine Co | SEOHAN Const vs. Yooshin Engineering |
| EE HWA vs. Hanyang ENG Co | EE HWA vs. Nam Hwa Construction | EE HWA vs. KT Submarine Co | EE HWA vs. SEOHAN Const EngcoLtd |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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