Correlation Between Semyung Electric and UNISEM
Can any of the company-specific risk be diversified away by investing in both Semyung Electric and UNISEM 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 UNISEM 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 UNISEM Co, you can compare the effects of market volatilities on Semyung Electric and UNISEM 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 UNISEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semyung Electric and UNISEM.
Diversification Opportunities for Semyung Electric and UNISEM
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Semyung and UNISEM is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Semyung Electric Machinery and UNISEM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNISEM 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 UNISEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNISEM has no effect on the direction of Semyung Electric i.e., Semyung Electric and UNISEM go up and down completely randomly.
Pair Corralation between Semyung Electric and UNISEM
Assuming the 90 days trading horizon Semyung Electric Machinery is expected to generate 1.17 times more return on investment than UNISEM. However, Semyung Electric is 1.17 times more volatile than UNISEM Co. It trades about 0.35 of its potential returns per unit of risk. UNISEM Co is currently generating about 0.25 per unit of risk. If you would invest 442,689 in Semyung Electric Machinery on October 14, 2024 and sell it today you would earn a total of 77,311 from holding Semyung Electric Machinery or generate 17.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Semyung Electric Machinery vs. UNISEM Co
Performance |
| Timeline |
| Semyung Electric Mac |
| UNISEM |
Semyung Electric and UNISEM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semyung Electric and UNISEM
The main advantage of trading using opposite Semyung Electric and UNISEM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semyung Electric position performs unexpectedly, UNISEM 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 UNISEM will offset losses from the drop in UNISEM's long position.| Semyung Electric vs. Samyang Foods Co | Semyung Electric vs. Sung Bo Chemicals | Semyung Electric vs. JC Chemical Co | Semyung Electric vs. Jeju Air Co |
| UNISEM vs. Woorim Machinery Co | UNISEM vs. Hanmi Semiconductor Co | UNISEM vs. KEPCO Engineering Construction | UNISEM vs. Semyung Electric Machinery |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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