Correlation Between Seoul Broadcasting and Dongyang
Can any of the company-specific risk be diversified away by investing in both Seoul Broadcasting and Dongyang 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 Dongyang 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 Dongyang EP, you can compare the effects of market volatilities on Seoul Broadcasting and Dongyang 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 Dongyang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Broadcasting and Dongyang.
Diversification Opportunities for Seoul Broadcasting and Dongyang
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seoul and Dongyang is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Broadcasting System and Dongyang EP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongyang EP 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 Dongyang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongyang EP has no effect on the direction of Seoul Broadcasting i.e., Seoul Broadcasting and Dongyang go up and down completely randomly.
Pair Corralation between Seoul Broadcasting and Dongyang
Assuming the 90 days trading horizon Seoul Broadcasting System is expected to under-perform the Dongyang. In addition to that, Seoul Broadcasting is 1.22 times more volatile than Dongyang EP. It trades about -0.07 of its total potential returns per unit of risk. Dongyang EP is currently generating about -0.01 per unit of volatility. If you would invest 2,024,252 in Dongyang EP on September 14, 2024 and sell it today you would lose (184,252) from holding Dongyang EP or give up 9.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoul Broadcasting System vs. Dongyang EP
Performance |
| Timeline |
| Seoul Broadcasting System |
| Dongyang EP |
Seoul Broadcasting and Dongyang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Broadcasting and Dongyang
The main advantage of trading using opposite Seoul Broadcasting and Dongyang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Broadcasting position performs unexpectedly, Dongyang 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 Dongyang will offset losses from the drop in Dongyang's long position.| Seoul Broadcasting vs. YG Entertainment | Seoul Broadcasting vs. JYP Entertainment | Seoul Broadcasting vs. Cube Entertainment | Seoul Broadcasting vs. FNC Entertainment Co |
| Dongyang vs. InnoTherapy | Dongyang vs. Seoul Broadcasting System | Dongyang vs. Mobile Appliance | Dongyang vs. Digital Power Communications |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |