Correlation Between Seohee Construction and Dongkuk Steel
Can any of the company-specific risk be diversified away by investing in both Seohee Construction and Dongkuk Steel 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 Seohee Construction and Dongkuk Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seohee Construction Co and Dongkuk Steel Mill, you can compare the effects of market volatilities on Seohee Construction and Dongkuk Steel 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 Seohee Construction with a short position of Dongkuk Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seohee Construction and Dongkuk Steel.
Diversification Opportunities for Seohee Construction and Dongkuk Steel
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Seohee and Dongkuk is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Seohee Construction Co and Dongkuk Steel Mill in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongkuk Steel Mill and Seohee Construction 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 Seohee Construction Co are associated (or correlated) with Dongkuk Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongkuk Steel Mill has no effect on the direction of Seohee Construction i.e., Seohee Construction and Dongkuk Steel go up and down completely randomly.
Pair Corralation between Seohee Construction and Dongkuk Steel
Assuming the 90 days trading horizon Seohee Construction Co is expected to generate 1.14 times more return on investment than Dongkuk Steel. However, Seohee Construction is 1.14 times more volatile than Dongkuk Steel Mill. It trades about 0.0 of its potential returns per unit of risk. Dongkuk Steel Mill is currently generating about -0.27 per unit of risk. If you would invest 141,700 in Seohee Construction Co on August 29, 2024 and sell it today you would lose (200.00) from holding Seohee Construction Co or give up 0.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seohee Construction Co vs. Dongkuk Steel Mill
Performance |
| Timeline |
| Seohee Construction |
| Dongkuk Steel Mill |
Seohee Construction and Dongkuk Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seohee Construction and Dongkuk Steel
The main advantage of trading using opposite Seohee Construction and Dongkuk Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seohee Construction position performs unexpectedly, Dongkuk Steel 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 Dongkuk Steel will offset losses from the drop in Dongkuk Steel's long position.| Seohee Construction vs. KCC Engineering Construction | Seohee Construction vs. Samchuly Bicycle Co | Seohee Construction vs. SFA Engineering | Seohee Construction vs. SEOHAN Const EngcoLtd |
| Dongkuk Steel vs. Jeju Beer Co | Dongkuk Steel vs. Sungdo Engineering Construction | Dongkuk Steel vs. Seohee Construction Co | Dongkuk Steel vs. Samick Musical Instruments |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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