Correlation Between Seoul Electronics and Korea Alcohol
Can any of the company-specific risk be diversified away by investing in both Seoul Electronics and Korea Alcohol 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 Korea Alcohol 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 Korea Alcohol Industrial, you can compare the effects of market volatilities on Seoul Electronics and Korea Alcohol 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 Korea Alcohol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Electronics and Korea Alcohol.
Diversification Opportunities for Seoul Electronics and Korea Alcohol
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Seoul and Korea is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Electronics Telecom and Korea Alcohol Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Alcohol Industrial 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 Korea Alcohol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Alcohol Industrial has no effect on the direction of Seoul Electronics i.e., Seoul Electronics and Korea Alcohol go up and down completely randomly.
Pair Corralation between Seoul Electronics and Korea Alcohol
Assuming the 90 days trading horizon Seoul Electronics Telecom is expected to under-perform the Korea Alcohol. In addition to that, Seoul Electronics is 2.12 times more volatile than Korea Alcohol Industrial. It trades about -0.04 of its total potential returns per unit of risk. Korea Alcohol Industrial is currently generating about -0.06 per unit of volatility. If you would invest 988,208 in Korea Alcohol Industrial on October 18, 2024 and sell it today you would lose (132,208) from holding Korea Alcohol Industrial or give up 13.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoul Electronics Telecom vs. Korea Alcohol Industrial
Performance |
| Timeline |
| Seoul Electronics Telecom |
| Korea Alcohol Industrial |
Seoul Electronics and Korea Alcohol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Electronics and Korea Alcohol
The main advantage of trading using opposite Seoul Electronics and Korea Alcohol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Electronics position performs unexpectedly, Korea Alcohol 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 Korea Alcohol will offset losses from the drop in Korea Alcohol's long position.| Seoul Electronics vs. Koh Young Technology | Seoul Electronics vs. Jeju Beer Co | Seoul Electronics vs. Dongil Technology | Seoul Electronics vs. HB Technology TD |
| Korea Alcohol vs. Seoul Electronics Telecom | Korea Alcohol vs. Dongkuk Structures Construction | Korea Alcohol vs. Daeduck Electronics Co | Korea Alcohol vs. Shinil Electronics 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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