Correlation Between Seohee Construction and Stic Investments
Can any of the company-specific risk be diversified away by investing in both Seohee Construction and Stic Investments 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 Stic Investments 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 Stic Investments, you can compare the effects of market volatilities on Seohee Construction and Stic Investments 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 Stic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seohee Construction and Stic Investments.
Diversification Opportunities for Seohee Construction and Stic Investments
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Seohee and Stic is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Seohee Construction Co and Stic Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stic Investments 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 Stic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stic Investments has no effect on the direction of Seohee Construction i.e., Seohee Construction and Stic Investments go up and down completely randomly.
Pair Corralation between Seohee Construction and Stic Investments
Assuming the 90 days trading horizon Seohee Construction Co is expected to under-perform the Stic Investments. But the stock apears to be less risky and, when comparing its historical volatility, Seohee Construction Co is 1.0 times less risky than Stic Investments. The stock trades about -0.15 of its potential returns per unit of risk. The Stic Investments is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 864,000 in Stic Investments on November 4, 2024 and sell it today you would lose (27,000) from holding Stic Investments or give up 3.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seohee Construction Co vs. Stic Investments
Performance |
| Timeline |
| Seohee Construction |
| Stic Investments |
Seohee Construction and Stic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seohee Construction and Stic Investments
The main advantage of trading using opposite Seohee Construction and Stic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seohee Construction position performs unexpectedly, Stic Investments 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 Stic Investments will offset losses from the drop in Stic Investments' 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 |
| Stic Investments vs. Heungkuk Metaltech CoLtd | Stic Investments vs. Daou Data Corp | Stic Investments vs. DONGKUK TED METAL | Stic Investments vs. Jeong Moon Information |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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