Correlation Between Seoyon Topmetal and Ajusteel
Can any of the company-specific risk be diversified away by investing in both Seoyon Topmetal and Ajusteel 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 Ajusteel 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 Ajusteel Co, you can compare the effects of market volatilities on Seoyon Topmetal and Ajusteel 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 Ajusteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoyon Topmetal and Ajusteel.
Diversification Opportunities for Seoyon Topmetal and Ajusteel
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Seoyon and Ajusteel is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Seoyon Topmetal Co and Ajusteel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ajusteel 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 Ajusteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ajusteel has no effect on the direction of Seoyon Topmetal i.e., Seoyon Topmetal and Ajusteel go up and down completely randomly.
Pair Corralation between Seoyon Topmetal and Ajusteel
Assuming the 90 days trading horizon Seoyon Topmetal Co is expected to generate 1.2 times more return on investment than Ajusteel. However, Seoyon Topmetal is 1.2 times more volatile than Ajusteel Co. It trades about -0.07 of its potential returns per unit of risk. Ajusteel Co is currently generating about -0.38 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 | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Seoyon Topmetal Co vs. Ajusteel Co
Performance |
| Timeline |
| Seoyon Topmetal |
| Ajusteel |
Seoyon Topmetal and Ajusteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoyon Topmetal and Ajusteel
The main advantage of trading using opposite Seoyon Topmetal and Ajusteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoyon Topmetal position performs unexpectedly, Ajusteel 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 Ajusteel will offset losses from the drop in Ajusteel's long position.| Seoyon Topmetal vs. LG Display | Seoyon Topmetal vs. Hyundai Motor | Seoyon Topmetal vs. Hyundai Motor Co | Seoyon Topmetal vs. Hyundai Motor Co |
| Ajusteel vs. Korea Information Communications | Ajusteel vs. Sungdo Engineering Construction | Ajusteel vs. Dongwoo Farm To | Ajusteel vs. Shinsegae Information Communication |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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