Correlation Between Semyung Electric and Dongwoo Farm
Can any of the company-specific risk be diversified away by investing in both Semyung Electric and Dongwoo Farm 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 Dongwoo Farm 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 Dongwoo Farm To, you can compare the effects of market volatilities on Semyung Electric and Dongwoo Farm 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 Dongwoo Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semyung Electric and Dongwoo Farm.
Diversification Opportunities for Semyung Electric and Dongwoo Farm
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Semyung and Dongwoo is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Semyung Electric Machinery and Dongwoo Farm To in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwoo Farm To 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 Dongwoo Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwoo Farm To has no effect on the direction of Semyung Electric i.e., Semyung Electric and Dongwoo Farm go up and down completely randomly.
Pair Corralation between Semyung Electric and Dongwoo Farm
Assuming the 90 days trading horizon Semyung Electric Machinery is expected to generate 4.01 times more return on investment than Dongwoo Farm. However, Semyung Electric is 4.01 times more volatile than Dongwoo Farm To. It trades about 0.26 of its potential returns per unit of risk. Dongwoo Farm To is currently generating about 0.54 per unit of risk. If you would invest 440,227 in Semyung Electric Machinery on October 12, 2024 and sell it today you would earn a total of 52,273 from holding Semyung Electric Machinery or generate 11.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Semyung Electric Machinery vs. Dongwoo Farm To
Performance |
| Timeline |
| Semyung Electric Mac |
| Dongwoo Farm To |
Semyung Electric and Dongwoo Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semyung Electric and Dongwoo Farm
The main advantage of trading using opposite Semyung Electric and Dongwoo Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semyung Electric position performs unexpectedly, Dongwoo Farm 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 Dongwoo Farm will offset losses from the drop in Dongwoo Farm's long position.| Semyung Electric vs. Koryo Credit Information | Semyung Electric vs. Polaris Office Corp | Semyung Electric vs. Industrial Bank | Semyung Electric vs. Hanjin Transportation Co |
| Dongwoo Farm vs. Vitzro Tech Co | Dongwoo Farm vs. Youngsin Metal Industrial | Dongwoo Farm vs. Dongbang Transport Logistics | Dongwoo Farm vs. Hanjoo Light Metal |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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