Correlation Between Seohee Construction and Kyung Chang
Can any of the company-specific risk be diversified away by investing in both Seohee Construction and Kyung Chang 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 Kyung Chang 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 Kyung Chang Industrial, you can compare the effects of market volatilities on Seohee Construction and Kyung Chang 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 Kyung Chang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seohee Construction and Kyung Chang.
Diversification Opportunities for Seohee Construction and Kyung Chang
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Seohee and Kyung is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Seohee Construction Co and Kyung Chang Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyung Chang Industrial 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 Kyung Chang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyung Chang Industrial has no effect on the direction of Seohee Construction i.e., Seohee Construction and Kyung Chang go up and down completely randomly.
Pair Corralation between Seohee Construction and Kyung Chang
Assuming the 90 days trading horizon Seohee Construction Co is expected to generate 1.11 times more return on investment than Kyung Chang. However, Seohee Construction is 1.11 times more volatile than Kyung Chang Industrial. It trades about 0.18 of its potential returns per unit of risk. Kyung Chang Industrial is currently generating about -0.29 per unit of risk. If you would invest 141,400 in Seohee Construction Co on September 1, 2024 and sell it today you would earn a total of 10,300 from holding Seohee Construction Co or generate 7.28% 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. Kyung Chang Industrial
Performance |
| Timeline |
| Seohee Construction |
| Kyung Chang Industrial |
Seohee Construction and Kyung Chang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seohee Construction and Kyung Chang
The main advantage of trading using opposite Seohee Construction and Kyung Chang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seohee Construction position performs unexpectedly, Kyung Chang 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 Kyung Chang will offset losses from the drop in Kyung Chang'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 |
| Kyung Chang vs. FNC Entertainment Co | Kyung Chang vs. Samick Musical Instruments | Kyung Chang vs. Tamul Multimedia Co | Kyung Chang vs. Daedong Metals 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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