Correlation Between Stic Investments and Seoul Food
Can any of the company-specific risk be diversified away by investing in both Stic Investments and Seoul Food 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 Stic Investments and Seoul Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stic Investments and Seoul Food Industrial, you can compare the effects of market volatilities on Stic Investments and Seoul Food 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 Stic Investments with a short position of Seoul Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stic Investments and Seoul Food.
Diversification Opportunities for Stic Investments and Seoul Food
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stic and Seoul is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Stic Investments and Seoul Food Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Food Industrial and Stic Investments 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 Stic Investments are associated (or correlated) with Seoul Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Food Industrial has no effect on the direction of Stic Investments i.e., Stic Investments and Seoul Food go up and down completely randomly.
Pair Corralation between Stic Investments and Seoul Food
Assuming the 90 days trading horizon Stic Investments is expected to generate 1.23 times more return on investment than Seoul Food. However, Stic Investments is 1.23 times more volatile than Seoul Food Industrial. It trades about 0.07 of its potential returns per unit of risk. Seoul Food Industrial is currently generating about -0.12 per unit of risk. If you would invest 805,000 in Stic Investments on September 2, 2024 and sell it today you would earn a total of 23,000 from holding Stic Investments or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stic Investments vs. Seoul Food Industrial
Performance |
| Timeline |
| Stic Investments |
| Seoul Food Industrial |
Stic Investments and Seoul Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stic Investments and Seoul Food
The main advantage of trading using opposite Stic Investments and Seoul Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stic Investments position performs unexpectedly, Seoul Food 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 Seoul Food will offset losses from the drop in Seoul Food's long position.| Stic Investments vs. Dongsin Engineering Construction | Stic Investments vs. Doosan Fuel Cell | Stic Investments vs. Daishin Balance 1 | Stic Investments vs. Total Soft Bank |
| Seoul Food vs. AptaBio Therapeutics | Seoul Food vs. Daewoo SBI SPAC | Seoul Food vs. Dream Security co | Seoul Food vs. Microfriend |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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