Correlation Between Taegu Broadcasting and Seohee Construction
Can any of the company-specific risk be diversified away by investing in both Taegu Broadcasting and Seohee Construction 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 Taegu Broadcasting and Seohee Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taegu Broadcasting and Seohee Construction Co, you can compare the effects of market volatilities on Taegu Broadcasting and Seohee Construction 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 Taegu Broadcasting with a short position of Seohee Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taegu Broadcasting and Seohee Construction.
Diversification Opportunities for Taegu Broadcasting and Seohee Construction
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Taegu and Seohee is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Taegu Broadcasting and Seohee Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seohee Construction and Taegu Broadcasting 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 Taegu Broadcasting are associated (or correlated) with Seohee Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seohee Construction has no effect on the direction of Taegu Broadcasting i.e., Taegu Broadcasting and Seohee Construction go up and down completely randomly.
Pair Corralation between Taegu Broadcasting and Seohee Construction
Assuming the 90 days trading horizon Taegu Broadcasting is expected to under-perform the Seohee Construction. But the stock apears to be less risky and, when comparing its historical volatility, Taegu Broadcasting is 1.04 times less risky than Seohee Construction. The stock trades about -0.05 of its potential returns per unit of risk. The Seohee Construction Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 121,241 in Seohee Construction Co on August 27, 2024 and sell it today you would earn a total of 19,659 from holding Seohee Construction Co or generate 16.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taegu Broadcasting vs. Seohee Construction Co
Performance |
| Timeline |
| Taegu Broadcasting |
| Seohee Construction |
Taegu Broadcasting and Seohee Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taegu Broadcasting and Seohee Construction
The main advantage of trading using opposite Taegu Broadcasting and Seohee Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taegu Broadcasting position performs unexpectedly, Seohee Construction 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 Seohee Construction will offset losses from the drop in Seohee Construction's long position.| Taegu Broadcasting vs. AfreecaTV Co | Taegu Broadcasting vs. SS TECH | Taegu Broadcasting vs. Busan Industrial Co | Taegu Broadcasting vs. Busan Ind |
| Seohee Construction vs. KCC Engineering Construction | Seohee Construction vs. Samchuly Bicycle Co | Seohee Construction vs. SFA Engineering | Seohee Construction vs. SEOHAN Const EngcoLtd |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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