Correlation Between BYON and Sejong Telecom
Can any of the company-specific risk be diversified away by investing in both BYON and Sejong Telecom 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 BYON and Sejong Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BYON Co and Sejong Telecom, you can compare the effects of market volatilities on BYON and Sejong Telecom 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 BYON with a short position of Sejong Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYON and Sejong Telecom.
Diversification Opportunities for BYON and Sejong Telecom
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BYON and Sejong is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding BYON Co and Sejong Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sejong Telecom and BYON 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 BYON Co are associated (or correlated) with Sejong Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sejong Telecom has no effect on the direction of BYON i.e., BYON and Sejong Telecom go up and down completely randomly.
Pair Corralation between BYON and Sejong Telecom
Assuming the 90 days trading horizon BYON Co is expected to under-perform the Sejong Telecom. In addition to that, BYON is 3.64 times more volatile than Sejong Telecom. It trades about -0.04 of its total potential returns per unit of risk. Sejong Telecom is currently generating about -0.12 per unit of volatility. If you would invest 62,117 in Sejong Telecom on November 3, 2024 and sell it today you would lose (20,717) from holding Sejong Telecom or give up 33.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.51% |
| Values | Daily Returns |
BYON Co vs. Sejong Telecom
Performance |
| Timeline |
| BYON |
| Sejong Telecom |
BYON and Sejong Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYON and Sejong Telecom
The main advantage of trading using opposite BYON and Sejong Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYON position performs unexpectedly, Sejong Telecom 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 Sejong Telecom will offset losses from the drop in Sejong Telecom's long position.| BYON vs. INNOX Advanced Materials | BYON vs. Seoyon Topmetal Co | BYON vs. Formetal Co | BYON vs. MetaLabs Co |
| Sejong Telecom vs. Sam Chun Dang | Sejong Telecom vs. SAMRYOONG CoLtd | Sejong Telecom vs. BYON Co | Sejong Telecom vs. Sangsangin 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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