Correlation Between Seohee Construction and N Citron
Can any of the company-specific risk be diversified away by investing in both Seohee Construction and N Citron 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 N Citron 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 N Citron, you can compare the effects of market volatilities on Seohee Construction and N Citron 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 N Citron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seohee Construction and N Citron.
Diversification Opportunities for Seohee Construction and N Citron
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seohee and 101400 is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Seohee Construction Co and N Citron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on N Citron 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 N Citron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of N Citron has no effect on the direction of Seohee Construction i.e., Seohee Construction and N Citron go up and down completely randomly.
Pair Corralation between Seohee Construction and N Citron
Assuming the 90 days trading horizon Seohee Construction Co is expected to generate 1.2 times more return on investment than N Citron. However, Seohee Construction is 1.2 times more volatile than N Citron. It trades about 0.16 of its potential returns per unit of risk. N Citron is currently generating about -0.09 per unit of risk. If you would invest 143,000 in Seohee Construction Co on September 3, 2024 and sell it today you would earn a total of 8,700 from holding Seohee Construction Co or generate 6.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seohee Construction Co vs. N Citron
Performance |
| Timeline |
| Seohee Construction |
| N Citron |
Seohee Construction and N Citron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seohee Construction and N Citron
The main advantage of trading using opposite Seohee Construction and N Citron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seohee Construction position performs unexpectedly, N Citron 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 N Citron will offset losses from the drop in N Citron'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 |
| N Citron vs. Dongsin Engineering Construction | N Citron vs. Doosan Fuel Cell | N Citron vs. Daishin Balance 1 | N Citron vs. Total Soft Bank |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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