Correlation Between Seohee Construction and Semyung Electric
Can any of the company-specific risk be diversified away by investing in both Seohee Construction and Semyung Electric 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 Semyung Electric 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 Semyung Electric Machinery, you can compare the effects of market volatilities on Seohee Construction and Semyung Electric 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 Semyung Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seohee Construction and Semyung Electric.
Diversification Opportunities for Seohee Construction and Semyung Electric
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Seohee and Semyung is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Seohee Construction Co and Semyung Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semyung Electric Mac 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 Semyung Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semyung Electric Mac has no effect on the direction of Seohee Construction i.e., Seohee Construction and Semyung Electric go up and down completely randomly.
Pair Corralation between Seohee Construction and Semyung Electric
Assuming the 90 days trading horizon Seohee Construction is expected to generate 1.67 times less return on investment than Semyung Electric. But when comparing it to its historical volatility, Seohee Construction Co is 3.25 times less risky than Semyung Electric. It trades about 0.07 of its potential returns per unit of risk. Semyung Electric Machinery is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 433,000 in Semyung Electric Machinery on September 5, 2024 and sell it today you would earn a total of 25,000 from holding Semyung Electric Machinery or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seohee Construction Co vs. Semyung Electric Machinery
Performance |
| Timeline |
| Seohee Construction |
| Semyung Electric Mac |
Seohee Construction and Semyung Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seohee Construction and Semyung Electric
The main advantage of trading using opposite Seohee Construction and Semyung Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seohee Construction position performs unexpectedly, Semyung Electric 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 Semyung Electric will offset losses from the drop in Semyung Electric'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 |
| Semyung Electric vs. PLAYWITH | Semyung Electric vs. Hyundai Engineering Plastics | Semyung Electric vs. Hana Materials | Semyung Electric vs. Lake Materials Co |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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