Correlation Between Seoul Electronics and Dongsuh
Can any of the company-specific risk be diversified away by investing in both Seoul Electronics and Dongsuh 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 Dongsuh 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 Dongsuh, you can compare the effects of market volatilities on Seoul Electronics and Dongsuh 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 Dongsuh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Electronics and Dongsuh.
Diversification Opportunities for Seoul Electronics and Dongsuh
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Seoul and Dongsuh is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Electronics Telecom and Dongsuh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongsuh 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 Dongsuh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongsuh has no effect on the direction of Seoul Electronics i.e., Seoul Electronics and Dongsuh go up and down completely randomly.
Pair Corralation between Seoul Electronics and Dongsuh
Assuming the 90 days trading horizon Seoul Electronics Telecom is expected to under-perform the Dongsuh. But the stock apears to be less risky and, when comparing its historical volatility, Seoul Electronics Telecom is 2.81 times less risky than Dongsuh. The stock trades about -0.42 of its potential returns per unit of risk. The Dongsuh is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,700,000 in Dongsuh on September 3, 2024 and sell it today you would earn a total of 95,000 from holding Dongsuh or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoul Electronics Telecom vs. Dongsuh
Performance |
| Timeline |
| Seoul Electronics Telecom |
| Dongsuh |
Seoul Electronics and Dongsuh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Electronics and Dongsuh
The main advantage of trading using opposite Seoul Electronics and Dongsuh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Electronics position performs unexpectedly, Dongsuh 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 Dongsuh will offset losses from the drop in Dongsuh's long position.| Seoul Electronics vs. DC Media Co | Seoul Electronics vs. KB Financial Group | Seoul Electronics vs. Barunson Entertainment Arts | Seoul Electronics vs. Tamul Multimedia Co |
| Dongsuh vs. Samyang Foods Co | Dongsuh vs. FNSTech Co | Dongsuh vs. Sempio Foods Co | Dongsuh vs. Lotte Chilsung Beverage |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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