Correlation Between Korea Environment and Seoul Semiconductor
Can any of the company-specific risk be diversified away by investing in both Korea Environment and Seoul Semiconductor 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 Korea Environment and Seoul Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Environment Technology and Seoul Semiconductor Co, you can compare the effects of market volatilities on Korea Environment and Seoul Semiconductor 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 Korea Environment with a short position of Seoul Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Environment and Seoul Semiconductor.
Diversification Opportunities for Korea Environment and Seoul Semiconductor
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Korea and Seoul is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Korea Environment Technology and Seoul Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Semiconductor and Korea Environment 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 Korea Environment Technology are associated (or correlated) with Seoul Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Semiconductor has no effect on the direction of Korea Environment i.e., Korea Environment and Seoul Semiconductor go up and down completely randomly.
Pair Corralation between Korea Environment and Seoul Semiconductor
Assuming the 90 days trading horizon Korea Environment Technology is expected to generate 0.97 times more return on investment than Seoul Semiconductor. However, Korea Environment Technology is 1.03 times less risky than Seoul Semiconductor. It trades about 0.2 of its potential returns per unit of risk. Seoul Semiconductor Co is currently generating about -0.2 per unit of risk. If you would invest 682,155 in Korea Environment Technology on October 14, 2024 and sell it today you would earn a total of 210,845 from holding Korea Environment Technology or generate 30.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Environment Technology vs. Seoul Semiconductor Co
Performance |
| Timeline |
| Korea Environment |
| Seoul Semiconductor |
Korea Environment and Seoul Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Environment and Seoul Semiconductor
The main advantage of trading using opposite Korea Environment and Seoul Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Environment position performs unexpectedly, Seoul Semiconductor 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 Seoul Semiconductor will offset losses from the drop in Seoul Semiconductor's long position.| Korea Environment vs. Woori Financial Group | Korea Environment vs. Jb Financial | Korea Environment vs. Nh Investment And | Korea Environment vs. Hyundai Heavy Industries |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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