Correlation Between Semyung Electric and IQuest
Can any of the company-specific risk be diversified away by investing in both Semyung Electric and IQuest 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 IQuest 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 IQuest Co, you can compare the effects of market volatilities on Semyung Electric and IQuest 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 IQuest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semyung Electric and IQuest.
Diversification Opportunities for Semyung Electric and IQuest
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Semyung and IQuest is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Semyung Electric Machinery and IQuest Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQuest 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 IQuest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQuest has no effect on the direction of Semyung Electric i.e., Semyung Electric and IQuest go up and down completely randomly.
Pair Corralation between Semyung Electric and IQuest
Assuming the 90 days trading horizon Semyung Electric Machinery is expected to generate 1.7 times more return on investment than IQuest. However, Semyung Electric is 1.7 times more volatile than IQuest Co. It trades about 0.04 of its potential returns per unit of risk. IQuest Co is currently generating about -0.03 per unit of risk. If you would invest 338,447 in Semyung Electric Machinery on September 4, 2024 and sell it today you would earn a total of 100,553 from holding Semyung Electric Machinery or generate 29.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Semyung Electric Machinery vs. IQuest Co
Performance |
| Timeline |
| Semyung Electric Mac |
| IQuest |
Semyung Electric and IQuest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semyung Electric and IQuest
The main advantage of trading using opposite Semyung Electric and IQuest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semyung Electric position performs unexpectedly, IQuest 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 IQuest will offset losses from the drop in IQuest's long position.| Semyung Electric vs. Dawonsys CoLtd | Semyung Electric vs. Daebo Magnetic CoLtd | Semyung Electric vs. Vitzro Tech Co | Semyung Electric vs. Busan Industrial Co |
| IQuest vs. LB Investment | IQuest vs. Lindeman Asia Investment | IQuest vs. DB Financial Investment | IQuest vs. Jinro Distillers 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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