Correlation Between Seohee Construction and Digital Power
Can any of the company-specific risk be diversified away by investing in both Seohee Construction and Digital Power 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 Digital Power 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 Digital Power Communications, you can compare the effects of market volatilities on Seohee Construction and Digital Power 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 Digital Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seohee Construction and Digital Power.
Diversification Opportunities for Seohee Construction and Digital Power
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Seohee and Digital is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Seohee Construction Co and Digital Power Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Power Commun 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 Digital Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Power Commun has no effect on the direction of Seohee Construction i.e., Seohee Construction and Digital Power go up and down completely randomly.
Pair Corralation between Seohee Construction and Digital Power
Assuming the 90 days trading horizon Seohee Construction Co is expected to generate 1.16 times more return on investment than Digital Power. However, Seohee Construction is 1.16 times more volatile than Digital Power Communications. It trades about 0.02 of its potential returns per unit of risk. Digital Power Communications is currently generating about -0.02 per unit of risk. If you would invest 162,400 in Seohee Construction Co on October 12, 2024 and sell it today you would earn a total of 800.00 from holding Seohee Construction Co or generate 0.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seohee Construction Co vs. Digital Power Communications
Performance |
| Timeline |
| Seohee Construction |
| Digital Power Commun |
Seohee Construction and Digital Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seohee Construction and Digital Power
The main advantage of trading using opposite Seohee Construction and Digital Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seohee Construction position performs unexpectedly, Digital Power 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 Digital Power will offset losses from the drop in Digital Power'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 |
| Digital Power vs. Taegu Broadcasting | Digital Power vs. Nam Hwa Construction | Digital Power vs. Seohee Construction Co | Digital Power vs. Iljin Display |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |