Correlation Between Seohee Construction and EBEST Investment
Can any of the company-specific risk be diversified away by investing in both Seohee Construction and EBEST Investment 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 EBEST Investment 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 EBEST Investment Securities, you can compare the effects of market volatilities on Seohee Construction and EBEST Investment 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 EBEST Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seohee Construction and EBEST Investment.
Diversification Opportunities for Seohee Construction and EBEST Investment
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Seohee and EBEST is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Seohee Construction Co and EBEST Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBEST Investment Sec 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 EBEST Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBEST Investment Sec has no effect on the direction of Seohee Construction i.e., Seohee Construction and EBEST Investment go up and down completely randomly.
Pair Corralation between Seohee Construction and EBEST Investment
Assuming the 90 days trading horizon Seohee Construction Co is expected to generate 1.32 times more return on investment than EBEST Investment. However, Seohee Construction is 1.32 times more volatile than EBEST Investment Securities. It trades about 0.2 of its potential returns per unit of risk. EBEST Investment Securities is currently generating about -0.29 per unit of risk. If you would invest 143,000 in Seohee Construction Co on September 4, 2024 and sell it today you would earn a total of 11,600 from holding Seohee Construction Co or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seohee Construction Co vs. EBEST Investment Securities
Performance |
| Timeline |
| Seohee Construction |
| EBEST Investment Sec |
Seohee Construction and EBEST Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seohee Construction and EBEST Investment
The main advantage of trading using opposite Seohee Construction and EBEST Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seohee Construction position performs unexpectedly, EBEST Investment 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 EBEST Investment will offset losses from the drop in EBEST Investment's long position.| Seohee Construction vs. LG Display | Seohee Construction vs. Hyundai Motor | Seohee Construction vs. Hyundai Motor Co | Seohee Construction vs. Hyundai Motor Co |
| EBEST Investment vs. ENERGYMACHINERY KOREA CoLtd | EBEST Investment vs. Hanshin Construction Co | EBEST Investment vs. Seohee Construction Co | EBEST Investment vs. Daejung Chemicals Metals |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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