Correlation Between Seoul Broadcasting and Xavis
Can any of the company-specific risk be diversified away by investing in both Seoul Broadcasting and Xavis 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 Xavis 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 Xavis Co, you can compare the effects of market volatilities on Seoul Broadcasting and Xavis 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 Xavis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Broadcasting and Xavis.
Diversification Opportunities for Seoul Broadcasting and Xavis
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seoul and Xavis is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Broadcasting System and Xavis Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xavis 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 Xavis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xavis has no effect on the direction of Seoul Broadcasting i.e., Seoul Broadcasting and Xavis go up and down completely randomly.
Pair Corralation between Seoul Broadcasting and Xavis
Assuming the 90 days trading horizon Seoul Broadcasting System is expected to generate 3.26 times more return on investment than Xavis. However, Seoul Broadcasting is 3.26 times more volatile than Xavis Co. It trades about 0.28 of its potential returns per unit of risk. Xavis Co is currently generating about 0.33 per unit of risk. If you would invest 1,540,000 in Seoul Broadcasting System on October 9, 2024 and sell it today you would earn a total of 840,000 from holding Seoul Broadcasting System or generate 54.55% 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. Xavis Co
Performance |
| Timeline |
| Seoul Broadcasting System |
| Xavis |
Seoul Broadcasting and Xavis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Broadcasting and Xavis
The main advantage of trading using opposite Seoul Broadcasting and Xavis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Broadcasting position performs unexpectedly, Xavis 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 Xavis will offset losses from the drop in Xavis' long position.| Seoul Broadcasting vs. Xavis Co | Seoul Broadcasting vs. Hurum Co | Seoul Broadcasting vs. Daishin Balance No8 | Seoul Broadcasting vs. Korea Real Estate |
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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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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