Correlation Between Sejong Industrial and KMH Hitech
Can any of the company-specific risk be diversified away by investing in both Sejong Industrial and KMH Hitech 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 Sejong Industrial and KMH Hitech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sejong Industrial and KMH Hitech Co, you can compare the effects of market volatilities on Sejong Industrial and KMH Hitech 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 Sejong Industrial with a short position of KMH Hitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sejong Industrial and KMH Hitech.
Diversification Opportunities for Sejong Industrial and KMH Hitech
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sejong and KMH is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Sejong Industrial and KMH Hitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KMH Hitech and Sejong Industrial 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 Sejong Industrial are associated (or correlated) with KMH Hitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KMH Hitech has no effect on the direction of Sejong Industrial i.e., Sejong Industrial and KMH Hitech go up and down completely randomly.
Pair Corralation between Sejong Industrial and KMH Hitech
Assuming the 90 days trading horizon Sejong Industrial is expected to generate 1.05 times more return on investment than KMH Hitech. However, Sejong Industrial is 1.05 times more volatile than KMH Hitech Co. It trades about -0.16 of its potential returns per unit of risk. KMH Hitech Co is currently generating about -0.19 per unit of risk. If you would invest 445,000 in Sejong Industrial on September 4, 2024 and sell it today you would lose (35,500) from holding Sejong Industrial or give up 7.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sejong Industrial vs. KMH Hitech Co
Performance |
| Timeline |
| Sejong Industrial |
| KMH Hitech |
Sejong Industrial and KMH Hitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sejong Industrial and KMH Hitech
The main advantage of trading using opposite Sejong Industrial and KMH Hitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sejong Industrial position performs unexpectedly, KMH Hitech 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 KMH Hitech will offset losses from the drop in KMH Hitech's long position.| Sejong Industrial vs. KMH Hitech Co | Sejong Industrial vs. Raontech | Sejong Industrial vs. Hwangkum Steel Technology | Sejong Industrial vs. CU Tech Corp |
| KMH Hitech vs. Cheryong Industrial CoLtd | KMH Hitech vs. Kbi Metal Co | KMH Hitech vs. Hyunwoo Industrial Co | KMH Hitech vs. Samhwa Paint Industrial |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |