Correlation Between Seoul Broadcasting and BYON
Can any of the company-specific risk be diversified away by investing in both Seoul Broadcasting and BYON 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 Seoul Broadcasting and BYON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seoul Broadcasting System and BYON Co, you can compare the effects of market volatilities on Seoul Broadcasting and BYON 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 Seoul Broadcasting with a short position of BYON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Broadcasting and BYON.
Diversification Opportunities for Seoul Broadcasting and BYON
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Seoul and BYON is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Broadcasting System and BYON Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BYON and Seoul 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 Seoul Broadcasting System are associated (or correlated) with BYON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BYON has no effect on the direction of Seoul Broadcasting i.e., Seoul Broadcasting and BYON go up and down completely randomly.
Pair Corralation between Seoul Broadcasting and BYON
Assuming the 90 days trading horizon Seoul Broadcasting System is expected to under-perform the BYON. But the stock apears to be less risky and, when comparing its historical volatility, Seoul Broadcasting System is 3.35 times less risky than BYON. The stock trades about -0.12 of its potential returns per unit of risk. The BYON Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 107,500 in BYON Co on September 3, 2024 and sell it today you would lose (24,500) from holding BYON Co or give up 22.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoul Broadcasting System vs. BYON Co
Performance |
| Timeline |
| Seoul Broadcasting System |
| BYON |
Seoul Broadcasting and BYON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Broadcasting and BYON
The main advantage of trading using opposite Seoul Broadcasting and BYON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Broadcasting position performs unexpectedly, BYON 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 BYON will offset losses from the drop in BYON's long position.| Seoul Broadcasting vs. Sunny Electronics Corp | Seoul Broadcasting vs. AurosTechnology | Seoul Broadcasting vs. Solution Advanced Technology | Seoul Broadcasting vs. Shinil Electronics Co |
| BYON vs. Shinhan Financial Group | BYON vs. Tway Air Co | BYON vs. Dongbu Insurance Co | BYON vs. Seoul Broadcasting System |
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 CEOs Directory module to screen CEOs from public companies around the world.
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