Correlation Between Seohee Construction and Carriesoft
Can any of the company-specific risk be diversified away by investing in both Seohee Construction and Carriesoft 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 Carriesoft 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 Carriesoft Co, you can compare the effects of market volatilities on Seohee Construction and Carriesoft 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 Carriesoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seohee Construction and Carriesoft.
Diversification Opportunities for Seohee Construction and Carriesoft
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seohee and Carriesoft is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Seohee Construction Co and Carriesoft Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carriesoft 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 Carriesoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carriesoft has no effect on the direction of Seohee Construction i.e., Seohee Construction and Carriesoft go up and down completely randomly.
Pair Corralation between Seohee Construction and Carriesoft
Assuming the 90 days trading horizon Seohee Construction Co is expected to generate 0.61 times more return on investment than Carriesoft. However, Seohee Construction Co is 1.64 times less risky than Carriesoft. It trades about 0.19 of its potential returns per unit of risk. Carriesoft Co is currently generating about -0.15 per unit of risk. If you would invest 140,500 in Seohee Construction Co on September 2, 2024 and sell it today you would earn a total of 11,200 from holding Seohee Construction Co or generate 7.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seohee Construction Co vs. Carriesoft Co
Performance |
| Timeline |
| Seohee Construction |
| Carriesoft |
Seohee Construction and Carriesoft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seohee Construction and Carriesoft
The main advantage of trading using opposite Seohee Construction and Carriesoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seohee Construction position performs unexpectedly, Carriesoft 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 Carriesoft will offset losses from the drop in Carriesoft's long position.| Seohee Construction vs. Korea New Network | Seohee Construction vs. ICD Co | Seohee Construction vs. DYPNF CoLtd | Seohee Construction vs. Busan Industrial Co |
| Carriesoft vs. Pureun Mutual Savings | Carriesoft vs. CJ Seafood Corp | Carriesoft vs. Nh Investment And | Carriesoft vs. SBI Investment KOREA |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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