Correlation Between Semyung Electric and Cheryong Electric
Can any of the company-specific risk be diversified away by investing in both Semyung Electric and Cheryong Electric 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 Semyung Electric and Cheryong Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Semyung Electric Machinery and Cheryong Electric CoLtd, you can compare the effects of market volatilities on Semyung Electric and Cheryong Electric 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 Semyung Electric with a short position of Cheryong Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semyung Electric and Cheryong Electric.
Diversification Opportunities for Semyung Electric and Cheryong Electric
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Semyung and Cheryong is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Semyung Electric Machinery and Cheryong Electric CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheryong Electric CoLtd and Semyung Electric 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 Semyung Electric Machinery are associated (or correlated) with Cheryong Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheryong Electric CoLtd has no effect on the direction of Semyung Electric i.e., Semyung Electric and Cheryong Electric go up and down completely randomly.
Pair Corralation between Semyung Electric and Cheryong Electric
Assuming the 90 days trading horizon Semyung Electric Machinery is expected to generate 1.0 times more return on investment than Cheryong Electric. However, Semyung Electric is 1.0 times more volatile than Cheryong Electric CoLtd. It trades about 0.0 of its potential returns per unit of risk. Cheryong Electric CoLtd is currently generating about -0.05 per unit of risk. If you would invest 518,000 in Semyung Electric Machinery on September 14, 2024 and sell it today you would lose (73,500) from holding Semyung Electric Machinery or give up 14.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Semyung Electric Machinery vs. Cheryong Electric CoLtd
Performance |
| Timeline |
| Semyung Electric Mac |
| Cheryong Electric CoLtd |
Semyung Electric and Cheryong Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semyung Electric and Cheryong Electric
The main advantage of trading using opposite Semyung Electric and Cheryong Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semyung Electric position performs unexpectedly, Cheryong Electric 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 Cheryong Electric will offset losses from the drop in Cheryong Electric's long position.| Semyung Electric vs. HyVision System | Semyung Electric vs. Daebo Magnetic CoLtd | Semyung Electric vs. Vitzro Tech Co | Semyung Electric vs. Solution Advanced Technology |
| Cheryong Electric vs. HyVision System | Cheryong Electric vs. Daebo Magnetic CoLtd | Cheryong Electric vs. Vitzro Tech Co | Cheryong Electric vs. Solution Advanced Technology |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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