Correlation Between Seoyon Topmetal and KakaoBank Corp
Can any of the company-specific risk be diversified away by investing in both Seoyon Topmetal and KakaoBank Corp 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 KakaoBank Corp 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 KakaoBank Corp, you can compare the effects of market volatilities on Seoyon Topmetal and KakaoBank Corp 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 KakaoBank Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoyon Topmetal and KakaoBank Corp.
Diversification Opportunities for Seoyon Topmetal and KakaoBank Corp
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seoyon and KakaoBank is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Seoyon Topmetal Co and KakaoBank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KakaoBank Corp 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 KakaoBank Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KakaoBank Corp has no effect on the direction of Seoyon Topmetal i.e., Seoyon Topmetal and KakaoBank Corp go up and down completely randomly.
Pair Corralation between Seoyon Topmetal and KakaoBank Corp
Assuming the 90 days trading horizon Seoyon Topmetal Co is expected to generate 0.96 times more return on investment than KakaoBank Corp. However, Seoyon Topmetal Co is 1.05 times less risky than KakaoBank Corp. It trades about 0.13 of its potential returns per unit of risk. KakaoBank Corp is currently generating about 0.05 per unit of risk. If you would invest 344,000 in Seoyon Topmetal Co on November 3, 2024 and sell it today you would earn a total of 10,500 from holding Seoyon Topmetal Co or generate 3.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoyon Topmetal Co vs. KakaoBank Corp
Performance |
| Timeline |
| Seoyon Topmetal |
| KakaoBank Corp |
Seoyon Topmetal and KakaoBank Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoyon Topmetal and KakaoBank Corp
The main advantage of trading using opposite Seoyon Topmetal and KakaoBank Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoyon Topmetal position performs unexpectedly, KakaoBank Corp 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 KakaoBank Corp will offset losses from the drop in KakaoBank Corp's long position.| Seoyon Topmetal vs. Kukil Metal Co | Seoyon Topmetal vs. Eagon Industrial Co | Seoyon Topmetal vs. Shinhan Inverse Copper | Seoyon Topmetal vs. Dongil Metal Co |
| KakaoBank Corp vs. Hyundai Engineering Construction | KakaoBank Corp vs. Chorokbaem Healthcare Co | KakaoBank Corp vs. Dongbang Ship Machinery | KakaoBank Corp vs. Infinitt Healthcare 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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