Correlation Between UNISEM and Sejong Industrial
Can any of the company-specific risk be diversified away by investing in both UNISEM and Sejong Industrial 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 UNISEM and Sejong Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNISEM Co and Sejong Industrial, you can compare the effects of market volatilities on UNISEM and Sejong Industrial 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 UNISEM with a short position of Sejong Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNISEM and Sejong Industrial.
Diversification Opportunities for UNISEM and Sejong Industrial
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UNISEM and Sejong is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding UNISEM Co and Sejong Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sejong Industrial and UNISEM 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 UNISEM Co are associated (or correlated) with Sejong Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sejong Industrial has no effect on the direction of UNISEM i.e., UNISEM and Sejong Industrial go up and down completely randomly.
Pair Corralation between UNISEM and Sejong Industrial
Assuming the 90 days trading horizon UNISEM Co is expected to under-perform the Sejong Industrial. In addition to that, UNISEM is 1.13 times more volatile than Sejong Industrial. It trades about -0.34 of its total potential returns per unit of risk. Sejong Industrial is currently generating about -0.18 per unit of volatility. If you would invest 445,000 in Sejong Industrial on September 4, 2024 and sell it today you would lose (39,000) from holding Sejong Industrial or give up 8.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNISEM Co vs. Sejong Industrial
Performance |
| Timeline |
| UNISEM |
| Sejong Industrial |
UNISEM and Sejong Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNISEM and Sejong Industrial
The main advantage of trading using opposite UNISEM and Sejong Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNISEM position performs unexpectedly, Sejong Industrial 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 Sejong Industrial will offset losses from the drop in Sejong Industrial's long position.| UNISEM vs. Coloray International Investment | UNISEM vs. NH Investment Securities | UNISEM vs. DB Insurance Co | UNISEM vs. Total Soft Bank |
| Sejong Industrial vs. KMH Hitech Co | Sejong Industrial vs. Raontech | Sejong Industrial vs. Hwangkum Steel Technology | Sejong Industrial vs. CU Tech Corp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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