Correlation Between Kmw and Seojin System
Can any of the company-specific risk be diversified away by investing in both Kmw and Seojin System 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 Kmw and Seojin System into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kmw Inc and Seojin System CoLtd, you can compare the effects of market volatilities on Kmw and Seojin System 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 Kmw with a short position of Seojin System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kmw and Seojin System.
Diversification Opportunities for Kmw and Seojin System
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kmw and Seojin is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Kmw Inc and Seojin System CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seojin System CoLtd and Kmw 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 Kmw Inc are associated (or correlated) with Seojin System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seojin System CoLtd has no effect on the direction of Kmw i.e., Kmw and Seojin System go up and down completely randomly.
Pair Corralation between Kmw and Seojin System
Assuming the 90 days trading horizon Kmw Inc is expected to under-perform the Seojin System. In addition to that, Kmw is 1.22 times more volatile than Seojin System CoLtd. It trades about -0.04 of its total potential returns per unit of risk. Seojin System CoLtd is currently generating about 0.03 per unit of volatility. If you would invest 1,940,000 in Seojin System CoLtd on November 27, 2024 and sell it today you would earn a total of 465,000 from holding Seojin System CoLtd or generate 23.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.16% |
| Values | Daily Returns |
Kmw Inc vs. Seojin System CoLtd
Performance |
| Timeline |
| Kmw Inc |
| Seojin System CoLtd |
Kmw and Seojin System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kmw and Seojin System
The main advantage of trading using opposite Kmw and Seojin System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kmw position performs unexpectedly, Seojin System 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 Seojin System will offset losses from the drop in Seojin System's long position.The idea behind Kmw Inc and Seojin System CoLtd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Seojin System vs. Alphabet Inc Class A | Seojin System vs. Mitra Energi Persada | Seojin System vs. Kmw Inc | Seojin System vs. Starbucks |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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