Correlation Between Seoyon Topmetal and Finebesteel
Can any of the company-specific risk be diversified away by investing in both Seoyon Topmetal and Finebesteel 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 Finebesteel 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 Finebesteel, you can compare the effects of market volatilities on Seoyon Topmetal and Finebesteel 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 Finebesteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoyon Topmetal and Finebesteel.
Diversification Opportunities for Seoyon Topmetal and Finebesteel
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seoyon and Finebesteel is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Seoyon Topmetal Co and Finebesteel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finebesteel 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 Finebesteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finebesteel has no effect on the direction of Seoyon Topmetal i.e., Seoyon Topmetal and Finebesteel go up and down completely randomly.
Pair Corralation between Seoyon Topmetal and Finebesteel
Assuming the 90 days trading horizon Seoyon Topmetal Co is expected to generate 0.78 times more return on investment than Finebesteel. However, Seoyon Topmetal Co is 1.29 times less risky than Finebesteel. It trades about -0.01 of its potential returns per unit of risk. Finebesteel is currently generating about -0.04 per unit of risk. If you would invest 472,318 in Seoyon Topmetal Co on August 24, 2024 and sell it today you would lose (83,818) from holding Seoyon Topmetal Co or give up 17.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoyon Topmetal Co vs. Finebesteel
Performance |
| Timeline |
| Seoyon Topmetal |
| Finebesteel |
Seoyon Topmetal and Finebesteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoyon Topmetal and Finebesteel
The main advantage of trading using opposite Seoyon Topmetal and Finebesteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoyon Topmetal position performs unexpectedly, Finebesteel 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 Finebesteel will offset losses from the drop in Finebesteel's long position.| Seoyon Topmetal vs. Busan Industrial Co | Seoyon Topmetal vs. Busan Ind | Seoyon Topmetal vs. Mirae Asset Daewoo | Seoyon Topmetal vs. UNISEM Co |
| Finebesteel vs. InnoTherapy | Finebesteel vs. Guyoung Technology Co | Finebesteel vs. Infinitt Healthcare Co | Finebesteel vs. Seoyon Topmetal 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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