Correlation Between Seohee Construction and Air Busan
Can any of the company-specific risk be diversified away by investing in both Seohee Construction and Air Busan 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 Air Busan 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 Air Busan Co, you can compare the effects of market volatilities on Seohee Construction and Air Busan 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 Air Busan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seohee Construction and Air Busan.
Diversification Opportunities for Seohee Construction and Air Busan
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Seohee and Air is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Seohee Construction Co and Air Busan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Busan 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 Air Busan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Busan has no effect on the direction of Seohee Construction i.e., Seohee Construction and Air Busan go up and down completely randomly.
Pair Corralation between Seohee Construction and Air Busan
Assuming the 90 days trading horizon Seohee Construction Co is expected to generate 0.66 times more return on investment than Air Busan. However, Seohee Construction Co is 1.52 times less risky than Air Busan. It trades about 0.03 of its potential returns per unit of risk. Air Busan Co is currently generating about 0.02 per unit of risk. If you would invest 121,705 in Seohee Construction Co on August 23, 2024 and sell it today you would earn a total of 19,195 from holding Seohee Construction Co or generate 15.77% 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. Air Busan Co
Performance |
| Timeline |
| Seohee Construction |
| Air Busan |
Seohee Construction and Air Busan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seohee Construction and Air Busan
The main advantage of trading using opposite Seohee Construction and Air Busan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seohee Construction position performs unexpectedly, Air Busan 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 Air Busan will offset losses from the drop in Air Busan'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 |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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