Correlation Between Sajo Seafood and KakaoBank Corp
Can any of the company-specific risk be diversified away by investing in both Sajo Seafood and KakaoBank Corp 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 Sajo Seafood and KakaoBank Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sajo Seafood and KakaoBank Corp, you can compare the effects of market volatilities on Sajo Seafood and KakaoBank Corp 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 Sajo Seafood with a short position of KakaoBank Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sajo Seafood and KakaoBank Corp.
Diversification Opportunities for Sajo Seafood and KakaoBank Corp
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sajo and KakaoBank is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sajo Seafood and KakaoBank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KakaoBank Corp and Sajo Seafood 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 Sajo Seafood are associated (or correlated) with KakaoBank Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KakaoBank Corp has no effect on the direction of Sajo Seafood i.e., Sajo Seafood and KakaoBank Corp go up and down completely randomly.
Pair Corralation between Sajo Seafood and KakaoBank Corp
Assuming the 90 days trading horizon Sajo Seafood is expected to generate 0.6 times more return on investment than KakaoBank Corp. However, Sajo Seafood is 1.66 times less risky than KakaoBank Corp. It trades about -0.12 of its potential returns per unit of risk. KakaoBank Corp is currently generating about -0.26 per unit of risk. If you would invest 472,500 in Sajo Seafood on October 12, 2024 and sell it today you would lose (14,500) from holding Sajo Seafood or give up 3.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sajo Seafood vs. KakaoBank Corp
Performance |
| Timeline |
| Sajo Seafood |
| KakaoBank Corp |
Sajo Seafood and KakaoBank Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sajo Seafood and KakaoBank Corp
The main advantage of trading using opposite Sajo Seafood and KakaoBank Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sajo Seafood position performs unexpectedly, KakaoBank Corp 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 KakaoBank Corp will offset losses from the drop in KakaoBank Corp's long position.| Sajo Seafood vs. Samsung Electronics Co | Sajo Seafood vs. Samsung Electronics Co | Sajo Seafood vs. KB Financial Group | Sajo Seafood vs. Shinhan Financial Group |
| KakaoBank Corp vs. Korea Alcohol Industrial | KakaoBank Corp vs. Sajo Seafood | KakaoBank Corp vs. Samji Electronics Co | KakaoBank Corp vs. Samwha Electronics 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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