Correlation Between Seoul Electronics and Hankukpackage
Can any of the company-specific risk be diversified away by investing in both Seoul Electronics and Hankukpackage 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 Hankukpackage 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 Hankukpackage Co, you can compare the effects of market volatilities on Seoul Electronics and Hankukpackage 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 Hankukpackage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Electronics and Hankukpackage.
Diversification Opportunities for Seoul Electronics and Hankukpackage
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seoul and Hankukpackage is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Electronics Telecom and Hankukpackage Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankukpackage 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 Hankukpackage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankukpackage has no effect on the direction of Seoul Electronics i.e., Seoul Electronics and Hankukpackage go up and down completely randomly.
Pair Corralation between Seoul Electronics and Hankukpackage
Assuming the 90 days trading horizon Seoul Electronics Telecom is expected to generate 1.16 times more return on investment than Hankukpackage. However, Seoul Electronics is 1.16 times more volatile than Hankukpackage Co. It trades about -0.07 of its potential returns per unit of risk. Hankukpackage Co is currently generating about -0.08 per unit of risk. If you would invest 26,300 in Seoul Electronics Telecom on October 29, 2024 and sell it today you would lose (3,000) from holding Seoul Electronics Telecom or give up 11.41% 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. Hankukpackage Co
Performance |
| Timeline |
| Seoul Electronics Telecom |
| Hankukpackage |
Seoul Electronics and Hankukpackage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Electronics and Hankukpackage
The main advantage of trading using opposite Seoul Electronics and Hankukpackage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Electronics position performs unexpectedly, Hankukpackage 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 Hankukpackage will offset losses from the drop in Hankukpackage's long position.| Seoul Electronics vs. Lee Ku Industrial | Seoul Electronics vs. Shinil Industrial Co | Seoul Electronics vs. Shinhan Inverse Silver | Seoul Electronics vs. Songwon Industrial Co |
| Hankukpackage vs. SS TECH | Hankukpackage vs. Orbitech Co | Hankukpackage vs. Solution Advanced Technology | Hankukpackage vs. Bosung Power Technology |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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