Correlation Between Seoul Broadcasting and Korea New
Can any of the company-specific risk be diversified away by investing in both Seoul Broadcasting and Korea New 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 Korea New 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 Korea New Network, you can compare the effects of market volatilities on Seoul Broadcasting and Korea New 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 Korea New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Broadcasting and Korea New.
Diversification Opportunities for Seoul Broadcasting and Korea New
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Seoul and Korea is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Broadcasting System and Korea New Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea New Network 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 Korea New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea New Network has no effect on the direction of Seoul Broadcasting i.e., Seoul Broadcasting and Korea New go up and down completely randomly.
Pair Corralation between Seoul Broadcasting and Korea New
Assuming the 90 days trading horizon Seoul Broadcasting is expected to generate 9.48 times less return on investment than Korea New. But when comparing it to its historical volatility, Seoul Broadcasting System is 2.8 times less risky than Korea New. It trades about 0.05 of its potential returns per unit of risk. Korea New Network is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 78,000 in Korea New Network on September 12, 2024 and sell it today you would earn a total of 8,000 from holding Korea New Network or generate 10.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Seoul Broadcasting System vs. Korea New Network
Performance |
| Timeline |
| Seoul Broadcasting System |
| Korea New Network |
Seoul Broadcasting and Korea New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Broadcasting and Korea New
The main advantage of trading using opposite Seoul Broadcasting and Korea New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Broadcasting position performs unexpectedly, Korea New 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 Korea New will offset losses from the drop in Korea New's long position.| Seoul Broadcasting vs. YG Entertainment | Seoul Broadcasting vs. JYP Entertainment | Seoul Broadcasting vs. Cube Entertainment | Seoul Broadcasting vs. FNC Entertainment Co |
| Korea New vs. BGF Retail Co | Korea New vs. LG Display Co | Korea New vs. Grand Korea Leisure | Korea New vs. Lake Materials 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 Stocks Directory module to find actively traded stocks across global markets.
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