Correlation Between Seoul Broadcasting and Korea Investment
Can any of the company-specific risk be diversified away by investing in both Seoul Broadcasting and Korea Investment 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 Investment 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 Investment Holdings, you can compare the effects of market volatilities on Seoul Broadcasting and Korea Investment 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 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Broadcasting and Korea Investment.
Diversification Opportunities for Seoul Broadcasting and Korea Investment
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seoul and Korea is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Broadcasting System and Korea Investment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Investment Holdings 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 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Investment Holdings has no effect on the direction of Seoul Broadcasting i.e., Seoul Broadcasting and Korea Investment go up and down completely randomly.
Pair Corralation between Seoul Broadcasting and Korea Investment
Assuming the 90 days trading horizon Seoul Broadcasting System is expected to under-perform the Korea Investment. In addition to that, Seoul Broadcasting is 1.07 times more volatile than Korea Investment Holdings. It trades about -0.06 of its total potential returns per unit of risk. Korea Investment Holdings is currently generating about 0.14 per unit of volatility. If you would invest 5,270,000 in Korea Investment Holdings on September 1, 2024 and sell it today you would earn a total of 140,000 from holding Korea Investment Holdings or generate 2.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoul Broadcasting System vs. Korea Investment Holdings
Performance |
| Timeline |
| Seoul Broadcasting System |
| Korea Investment Holdings |
Seoul Broadcasting and Korea Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Broadcasting and Korea Investment
The main advantage of trading using opposite Seoul Broadcasting and Korea Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Broadcasting position performs unexpectedly, Korea Investment 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 Investment will offset losses from the drop in Korea Investment's long position.| Seoul Broadcasting vs. Hana Technology Co | Seoul Broadcasting vs. Daeduck Electronics Co | Seoul Broadcasting vs. LG Electronics | Seoul Broadcasting vs. Dong A Steel Technology |
| Korea Investment vs. GS Retail Co | Korea Investment vs. Handok Clean Tech | Korea Investment vs. Samsung Life Insurance | Korea Investment vs. Clean Science 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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