Correlation Between Seoul Electronics and Nice Information
Can any of the company-specific risk be diversified away by investing in both Seoul Electronics and Nice Information 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 Nice Information 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 Nice Information Telecommunication, you can compare the effects of market volatilities on Seoul Electronics and Nice Information 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 Nice Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Electronics and Nice Information.
Diversification Opportunities for Seoul Electronics and Nice Information
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seoul and Nice is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Electronics Telecom and Nice Information Telecommunica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nice Information Tel 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 Nice Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nice Information Tel has no effect on the direction of Seoul Electronics i.e., Seoul Electronics and Nice Information go up and down completely randomly.
Pair Corralation between Seoul Electronics and Nice Information
Assuming the 90 days trading horizon Seoul Electronics Telecom is expected to under-perform the Nice Information. In addition to that, Seoul Electronics is 2.25 times more volatile than Nice Information Telecommunication. It trades about -0.16 of its total potential returns per unit of risk. Nice Information Telecommunication is currently generating about -0.15 per unit of volatility. If you would invest 1,869,000 in Nice Information Telecommunication on August 25, 2024 and sell it today you would lose (40,000) from holding Nice Information Telecommunication or give up 2.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoul Electronics Telecom vs. Nice Information Telecommunica
Performance |
| Timeline |
| Seoul Electronics Telecom |
| Nice Information Tel |
Seoul Electronics and Nice Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Electronics and Nice Information
The main advantage of trading using opposite Seoul Electronics and Nice Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Electronics position performs unexpectedly, Nice Information 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 Nice Information will offset losses from the drop in Nice Information's long position.| Seoul Electronics vs. CKH Food Health | Seoul Electronics vs. TK Chemical | Seoul Electronics vs. Golden Bridge Investment | Seoul Electronics vs. Tae Kyung Chemical |
| Nice Information vs. Soulbrain Holdings Co | Nice Information vs. NICE Total Cash | Nice Information vs. Geumhwa Plant Service | Nice Information vs. AfreecaTV 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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