Correlation Between Seoyon Topmetal and DB Financial
Can any of the company-specific risk be diversified away by investing in both Seoyon Topmetal and DB Financial 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 DB Financial 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 DB Financial Investment, you can compare the effects of market volatilities on Seoyon Topmetal and DB Financial 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 DB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoyon Topmetal and DB Financial.
Diversification Opportunities for Seoyon Topmetal and DB Financial
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Seoyon and 016610 is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Seoyon Topmetal Co and DB Financial Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Financial Investment 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 DB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DB Financial Investment has no effect on the direction of Seoyon Topmetal i.e., Seoyon Topmetal and DB Financial go up and down completely randomly.
Pair Corralation between Seoyon Topmetal and DB Financial
Assuming the 90 days trading horizon Seoyon Topmetal Co is expected to generate 1.17 times more return on investment than DB Financial. However, Seoyon Topmetal is 1.17 times more volatile than DB Financial Investment. It trades about 0.16 of its potential returns per unit of risk. DB Financial Investment is currently generating about 0.03 per unit of risk. If you would invest 348,000 in Seoyon Topmetal Co on October 20, 2024 and sell it today you would earn a total of 13,000 from holding Seoyon Topmetal Co or generate 3.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoyon Topmetal Co vs. DB Financial Investment
Performance |
| Timeline |
| Seoyon Topmetal |
| DB Financial Investment |
Seoyon Topmetal and DB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoyon Topmetal and DB Financial
The main advantage of trading using opposite Seoyon Topmetal and DB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoyon Topmetal position performs unexpectedly, DB Financial 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 DB Financial will offset losses from the drop in DB Financial's long position.| Seoyon Topmetal vs. Yura Tech Co | Seoyon Topmetal vs. RFTech Co | Seoyon Topmetal vs. Hankukpackage Co | Seoyon Topmetal vs. Spolytech Co |
| DB Financial vs. Sajo Seafood | DB Financial vs. Shinsegae Food | DB Financial vs. Haitai Confectionery Foods | DB Financial vs. Sam Yang Foods |
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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