Correlation Between Seoul Electronics and JC Chemical
Can any of the company-specific risk be diversified away by investing in both Seoul Electronics and JC Chemical 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 JC Chemical 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 JC Chemical Co, you can compare the effects of market volatilities on Seoul Electronics and JC Chemical 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 JC Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Electronics and JC Chemical.
Diversification Opportunities for Seoul Electronics and JC Chemical
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Seoul and 137950 is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Electronics Telecom and JC Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JC Chemical 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 JC Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JC Chemical has no effect on the direction of Seoul Electronics i.e., Seoul Electronics and JC Chemical go up and down completely randomly.
Pair Corralation between Seoul Electronics and JC Chemical
Assuming the 90 days trading horizon Seoul Electronics Telecom is expected to generate 0.76 times more return on investment than JC Chemical. However, Seoul Electronics Telecom is 1.32 times less risky than JC Chemical. It trades about -0.02 of its potential returns per unit of risk. JC Chemical Co is currently generating about -0.07 per unit of risk. If you would invest 27,900 in Seoul Electronics Telecom on October 14, 2024 and sell it today you would lose (1,400) from holding Seoul Electronics Telecom or give up 5.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoul Electronics Telecom vs. JC Chemical Co
Performance |
| Timeline |
| Seoul Electronics Telecom |
| JC Chemical |
Seoul Electronics and JC Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Electronics and JC Chemical
The main advantage of trading using opposite Seoul Electronics and JC Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Electronics position performs unexpectedly, JC Chemical 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 JC Chemical will offset losses from the drop in JC Chemical's long position.| Seoul Electronics vs. Dongnam Chemical Co | Seoul Electronics vs. Daejung Chemicals Metals | Seoul Electronics vs. Digital Power Communications | Seoul Electronics vs. Tae Kyung Chemical |
| JC Chemical vs. Seoul Electronics Telecom | JC Chemical vs. Hanwha Chemical Corp | JC Chemical vs. KPX Green Chemical | JC Chemical vs. UJU 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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