Correlation Between Seohee Construction and Vissem Electronics
Can any of the company-specific risk be diversified away by investing in both Seohee Construction and Vissem Electronics 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 Vissem Electronics 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 Vissem Electronics Co, you can compare the effects of market volatilities on Seohee Construction and Vissem Electronics 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 Vissem Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seohee Construction and Vissem Electronics.
Diversification Opportunities for Seohee Construction and Vissem Electronics
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Seohee and Vissem is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Seohee Construction Co and Vissem Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vissem Electronics 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 Vissem Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vissem Electronics has no effect on the direction of Seohee Construction i.e., Seohee Construction and Vissem Electronics go up and down completely randomly.
Pair Corralation between Seohee Construction and Vissem Electronics
Assuming the 90 days trading horizon Seohee Construction Co is expected to generate 0.91 times more return on investment than Vissem Electronics. However, Seohee Construction Co is 1.1 times less risky than Vissem Electronics. It trades about 0.08 of its potential returns per unit of risk. Vissem Electronics Co is currently generating about -0.1 per unit of risk. If you would invest 133,700 in Seohee Construction Co on October 25, 2024 and sell it today you would earn a total of 24,600 from holding Seohee Construction Co or generate 18.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seohee Construction Co vs. Vissem Electronics Co
Performance |
| Timeline |
| Seohee Construction |
| Vissem Electronics |
Seohee Construction and Vissem Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seohee Construction and Vissem Electronics
The main advantage of trading using opposite Seohee Construction and Vissem Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seohee Construction position performs unexpectedly, Vissem Electronics 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 Vissem Electronics will offset losses from the drop in Vissem Electronics' 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 |
| Vissem Electronics vs. Samsung Electronics Co | Vissem Electronics vs. Samsung Electronics Co | Vissem Electronics vs. SK Hynix | Vissem Electronics vs. HMM 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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