Correlation Between Camus Engineering and Seoam Machinery
Can any of the company-specific risk be diversified away by investing in both Camus Engineering and Seoam Machinery 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 Camus Engineering and Seoam Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camus Engineering Construction and Seoam Machinery Industry, you can compare the effects of market volatilities on Camus Engineering and Seoam Machinery 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 Camus Engineering with a short position of Seoam Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camus Engineering and Seoam Machinery.
Diversification Opportunities for Camus Engineering and Seoam Machinery
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Camus and Seoam is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Camus Engineering Construction and Seoam Machinery Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoam Machinery Industry and Camus Engineering 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 Camus Engineering Construction are associated (or correlated) with Seoam Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoam Machinery Industry has no effect on the direction of Camus Engineering i.e., Camus Engineering and Seoam Machinery go up and down completely randomly.
Pair Corralation between Camus Engineering and Seoam Machinery
Assuming the 90 days trading horizon Camus Engineering Construction is expected to under-perform the Seoam Machinery. But the stock apears to be less risky and, when comparing its historical volatility, Camus Engineering Construction is 1.33 times less risky than Seoam Machinery. The stock trades about -0.05 of its potential returns per unit of risk. The Seoam Machinery Industry is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 374,000 in Seoam Machinery Industry on September 2, 2024 and sell it today you would earn a total of 10,500 from holding Seoam Machinery Industry or generate 2.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Camus Engineering Construction vs. Seoam Machinery Industry
Performance |
| Timeline |
| Camus Engineering |
| Seoam Machinery Industry |
Camus Engineering and Seoam Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camus Engineering and Seoam Machinery
The main advantage of trading using opposite Camus Engineering and Seoam Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camus Engineering position performs unexpectedly, Seoam Machinery 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 Seoam Machinery will offset losses from the drop in Seoam Machinery's long position.| Camus Engineering vs. Samsung CT Corp | Camus Engineering vs. Hyundai Engineering Construction | Camus Engineering vs. Kolon Globalco |
| Seoam Machinery vs. Display Tech Co | Seoam Machinery vs. Youl Chon Chemical | Seoam Machinery vs. Digital Power Communications | Seoam Machinery vs. Sung Bo Chemicals |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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