Correlation Between Seoul Electronics and Daelim Trading
Can any of the company-specific risk be diversified away by investing in both Seoul Electronics and Daelim Trading 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 Seoul Electronics and Daelim Trading into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seoul Electronics Telecom and Daelim Trading Co, you can compare the effects of market volatilities on Seoul Electronics and Daelim Trading 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 Seoul Electronics with a short position of Daelim Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Electronics and Daelim Trading.
Diversification Opportunities for Seoul Electronics and Daelim Trading
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Seoul and Daelim is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Electronics Telecom and Daelim Trading Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daelim Trading and Seoul Electronics 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 Seoul Electronics Telecom are associated (or correlated) with Daelim Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daelim Trading has no effect on the direction of Seoul Electronics i.e., Seoul Electronics and Daelim Trading go up and down completely randomly.
Pair Corralation between Seoul Electronics and Daelim Trading
Assuming the 90 days trading horizon Seoul Electronics Telecom is expected to generate 2.38 times more return on investment than Daelim Trading. However, Seoul Electronics is 2.38 times more volatile than Daelim Trading Co. It trades about 0.02 of its potential returns per unit of risk. Daelim Trading Co is currently generating about -0.04 per unit of risk. If you would invest 23,700 in Seoul Electronics Telecom on November 4, 2024 and sell it today you would earn a total of 100.00 from holding Seoul Electronics Telecom or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoul Electronics Telecom vs. Daelim Trading Co
Performance |
| Timeline |
| Seoul Electronics Telecom |
| Daelim Trading |
Seoul Electronics and Daelim Trading Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Electronics and Daelim Trading
The main advantage of trading using opposite Seoul Electronics and Daelim Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Electronics position performs unexpectedly, Daelim Trading 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 Daelim Trading will offset losses from the drop in Daelim Trading's long position.| Seoul Electronics vs. Lotte Non Life Insurance | Seoul Electronics vs. Hankukpackage Co | Seoul Electronics vs. Jeju Air Co | Seoul Electronics vs. Cloud Air CoLtd |
| Daelim Trading vs. Wonil Special Steel | Daelim Trading vs. Kukil Metal Co | Daelim Trading vs. Seah Steel Corp | Daelim Trading vs. Moonbae Steel |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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