Correlation Between Seoyon Topmetal and Jeju Bank
Can any of the company-specific risk be diversified away by investing in both Seoyon Topmetal and Jeju Bank 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 Seoyon Topmetal and Jeju Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seoyon Topmetal Co and Jeju Bank, you can compare the effects of market volatilities on Seoyon Topmetal and Jeju Bank 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 Seoyon Topmetal with a short position of Jeju Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoyon Topmetal and Jeju Bank.
Diversification Opportunities for Seoyon Topmetal and Jeju Bank
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Seoyon and Jeju is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Seoyon Topmetal Co and Jeju Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Bank and Seoyon Topmetal 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 Seoyon Topmetal Co are associated (or correlated) with Jeju Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Bank has no effect on the direction of Seoyon Topmetal i.e., Seoyon Topmetal and Jeju Bank go up and down completely randomly.
Pair Corralation between Seoyon Topmetal and Jeju Bank
Assuming the 90 days trading horizon Seoyon Topmetal Co is expected to generate 1.84 times more return on investment than Jeju Bank. However, Seoyon Topmetal is 1.84 times more volatile than Jeju Bank. It trades about -0.07 of its potential returns per unit of risk. Jeju Bank is currently generating about -0.16 per unit of risk. If you would invest 382,000 in Seoyon Topmetal Co on September 1, 2024 and sell it today you would lose (16,000) from holding Seoyon Topmetal Co or give up 4.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoyon Topmetal Co vs. Jeju Bank
Performance |
| Timeline |
| Seoyon Topmetal |
| Jeju Bank |
Seoyon Topmetal and Jeju Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoyon Topmetal and Jeju Bank
The main advantage of trading using opposite Seoyon Topmetal and Jeju Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoyon Topmetal position performs unexpectedly, Jeju Bank 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 Jeju Bank will offset losses from the drop in Jeju Bank's long position.| Seoyon Topmetal vs. LG Display | Seoyon Topmetal vs. Hyundai Motor Co | Seoyon Topmetal vs. Hyundai Motor Co | Seoyon Topmetal vs. Adaptive Plasma Technology |
| Jeju Bank vs. AptaBio Therapeutics | Jeju Bank vs. Daewoo SBI SPAC | Jeju Bank vs. Dream Security co | Jeju Bank vs. Microfriend |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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