Correlation Between Synopex and Seobu TD
Can any of the company-specific risk be diversified away by investing in both Synopex and Seobu TD 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 Synopex and Seobu TD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synopex and Seobu TD Co, you can compare the effects of market volatilities on Synopex and Seobu TD 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 Synopex with a short position of Seobu TD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synopex and Seobu TD.
Diversification Opportunities for Synopex and Seobu TD
Poor diversification
The 3 months correlation between Synopex and Seobu is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Synopex and Seobu TD Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seobu TD and Synopex 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 Synopex are associated (or correlated) with Seobu TD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seobu TD has no effect on the direction of Synopex i.e., Synopex and Seobu TD go up and down completely randomly.
Pair Corralation between Synopex and Seobu TD
Assuming the 90 days trading horizon Synopex is expected to under-perform the Seobu TD. In addition to that, Synopex is 2.27 times more volatile than Seobu TD Co. It trades about -0.13 of its total potential returns per unit of risk. Seobu TD Co is currently generating about -0.18 per unit of volatility. If you would invest 626,000 in Seobu TD Co on September 4, 2024 and sell it today you would lose (46,000) from holding Seobu TD Co or give up 7.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synopex vs. Seobu TD Co
Performance |
| Timeline |
| Synopex |
| Seobu TD |
Synopex and Seobu TD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synopex and Seobu TD
The main advantage of trading using opposite Synopex and Seobu TD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synopex position performs unexpectedly, Seobu TD 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 Seobu TD will offset losses from the drop in Seobu TD's long position.| Synopex vs. Hanjoo Light Metal | Synopex vs. HJ ShipBuilding Construction | Synopex vs. MetaLabs Co | Synopex vs. Daekyung Machinery Engineering |
| Seobu TD vs. Seoul Semiconductor Co | Seobu TD vs. SFA Engineering | Seobu TD vs. SFA Semicon Co | Seobu TD vs. Synopex |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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