Correlation Between SEOHAN Const and Hanyang ENG
Can any of the company-specific risk be diversified away by investing in both SEOHAN Const and Hanyang ENG 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 Hanyang ENG 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 Hanyang ENG Co, you can compare the effects of market volatilities on SEOHAN Const and Hanyang ENG 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 Hanyang ENG. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEOHAN Const and Hanyang ENG.
Diversification Opportunities for SEOHAN Const and Hanyang ENG
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SEOHAN and Hanyang is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding SEOHAN Const EngcoLtd and Hanyang ENG Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanyang ENG 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 Hanyang ENG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanyang ENG has no effect on the direction of SEOHAN Const i.e., SEOHAN Const and Hanyang ENG go up and down completely randomly.
Pair Corralation between SEOHAN Const and Hanyang ENG
Assuming the 90 days trading horizon SEOHAN Const EngcoLtd is expected to under-perform the Hanyang ENG. But the stock apears to be less risky and, when comparing its historical volatility, SEOHAN Const EngcoLtd is 2.03 times less risky than Hanyang ENG. The stock trades about -0.04 of its potential returns per unit of risk. The Hanyang ENG Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,405,044 in Hanyang ENG Co on August 27, 2024 and sell it today you would earn a total of 275,956 from holding Hanyang ENG Co or generate 19.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEOHAN Const EngcoLtd vs. Hanyang ENG Co
Performance |
| Timeline |
| SEOHAN Const EngcoLtd |
| Hanyang ENG |
SEOHAN Const and Hanyang ENG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEOHAN Const and Hanyang ENG
The main advantage of trading using opposite SEOHAN Const and Hanyang ENG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEOHAN Const position performs unexpectedly, Hanyang ENG 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 Hanyang ENG will offset losses from the drop in Hanyang ENG'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 |
| Hanyang ENG vs. Samsung Electronics Co | Hanyang ENG vs. Samsung Electronics Co | Hanyang ENG vs. Hyundai Motor Co | Hanyang ENG vs. Hyundai Motor |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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