Correlation Between Seohee Construction and SEOHAN Const
Can any of the company-specific risk be diversified away by investing in both Seohee Construction and SEOHAN Const 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 SEOHAN Const 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 SEOHAN Const EngcoLtd, you can compare the effects of market volatilities on Seohee Construction and SEOHAN Const 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 SEOHAN Const. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seohee Construction and SEOHAN Const.
Diversification Opportunities for Seohee Construction and SEOHAN Const
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seohee and SEOHAN is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Seohee Construction Co and SEOHAN Const EngcoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEOHAN Const EngcoLtd 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 SEOHAN Const. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEOHAN Const EngcoLtd has no effect on the direction of Seohee Construction i.e., Seohee Construction and SEOHAN Const go up and down completely randomly.
Pair Corralation between Seohee Construction and SEOHAN Const
Assuming the 90 days trading horizon Seohee Construction Co is expected to under-perform the SEOHAN Const. In addition to that, Seohee Construction is 1.32 times more volatile than SEOHAN Const EngcoLtd. It trades about -0.04 of its total potential returns per unit of risk. SEOHAN Const EngcoLtd is currently generating about -0.03 per unit of volatility. If you would invest 83,100 in SEOHAN Const EngcoLtd on August 31, 2024 and sell it today you would lose (2,200) from holding SEOHAN Const EngcoLtd or give up 2.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seohee Construction Co vs. SEOHAN Const EngcoLtd
Performance |
| Timeline |
| Seohee Construction |
| SEOHAN Const EngcoLtd |
Seohee Construction and SEOHAN Const Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seohee Construction and SEOHAN Const
The main advantage of trading using opposite Seohee Construction and SEOHAN Const positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seohee Construction position performs unexpectedly, SEOHAN Const 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 SEOHAN Const will offset losses from the drop in SEOHAN Const'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 |
| SEOHAN Const vs. Dongil Metal Co | SEOHAN Const vs. MetaLabs Co | SEOHAN Const vs. SBI Investment KOREA | SEOHAN Const vs. Stic Investments |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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