Correlation Between Seoul Electronics and Atec
Can any of the company-specific risk be diversified away by investing in both Seoul Electronics and Atec 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 Atec 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 Atec Co, you can compare the effects of market volatilities on Seoul Electronics and Atec 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 Atec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Electronics and Atec.
Diversification Opportunities for Seoul Electronics and Atec
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Seoul and Atec is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Electronics Telecom and Atec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atec 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 Atec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atec has no effect on the direction of Seoul Electronics i.e., Seoul Electronics and Atec go up and down completely randomly.
Pair Corralation between Seoul Electronics and Atec
Assuming the 90 days trading horizon Seoul Electronics Telecom is expected to under-perform the Atec. But the stock apears to be less risky and, when comparing its historical volatility, Seoul Electronics Telecom is 1.8 times less risky than Atec. The stock trades about -0.07 of its potential returns per unit of risk. The Atec Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 834,097 in Atec Co on September 14, 2024 and sell it today you would earn a total of 2,560,903 from holding Atec Co or generate 307.03% 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. Atec Co
Performance |
| Timeline |
| Seoul Electronics Telecom |
| Atec |
Seoul Electronics and Atec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Electronics and Atec
The main advantage of trading using opposite Seoul Electronics and Atec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Electronics position performs unexpectedly, Atec 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 Atec will offset losses from the drop in Atec's long position.| Seoul Electronics vs. Korea New Network | Seoul Electronics vs. Solution Advanced Technology | Seoul Electronics vs. Busan Industrial Co | Seoul Electronics vs. Busan Ind |
| Atec vs. Digital Power Communications | Atec vs. Lotte Data Communication | Atec vs. Seoul Electronics Telecom | Atec vs. Korea Information Communications |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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