Correlation Between Seohee Construction and Hanshin Construction
Can any of the company-specific risk be diversified away by investing in both Seohee Construction and Hanshin Construction 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 Hanshin Construction 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 Hanshin Construction Co, you can compare the effects of market volatilities on Seohee Construction and Hanshin Construction 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 Hanshin Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seohee Construction and Hanshin Construction.
Diversification Opportunities for Seohee Construction and Hanshin Construction
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Seohee and Hanshin is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Seohee Construction Co and Hanshin Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanshin Construction 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 Hanshin Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanshin Construction has no effect on the direction of Seohee Construction i.e., Seohee Construction and Hanshin Construction go up and down completely randomly.
Pair Corralation between Seohee Construction and Hanshin Construction
Assuming the 90 days trading horizon Seohee Construction is expected to generate 34.91 times less return on investment than Hanshin Construction. But when comparing it to its historical volatility, Seohee Construction Co is 2.98 times less risky than Hanshin Construction. It trades about 0.0 of its potential returns per unit of risk. Hanshin Construction Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 674,000 in Hanshin Construction Co on August 25, 2024 and sell it today you would earn a total of 10,000 from holding Hanshin Construction Co or generate 1.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Seohee Construction Co vs. Hanshin Construction Co
Performance |
| Timeline |
| Seohee Construction |
| Hanshin Construction |
Seohee Construction and Hanshin Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seohee Construction and Hanshin Construction
The main advantage of trading using opposite Seohee Construction and Hanshin Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seohee Construction position performs unexpectedly, Hanshin Construction 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 Hanshin Construction will offset losses from the drop in Hanshin Construction's long position.| Seohee Construction vs. Samsung Electronics Co | Seohee Construction vs. Samsung Electronics Co | Seohee Construction vs. Hyundai Motor Co | Seohee Construction vs. Hyundai Motor |
| Hanshin Construction vs. AptaBio Therapeutics | Hanshin Construction vs. Daewoo SBI SPAC | Hanshin Construction vs. Dream Security co | Hanshin Construction vs. Microfriend |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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