Correlation Between Sejong Telecom and Automobile
Can any of the company-specific risk be diversified away by investing in both Sejong Telecom and Automobile 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 Sejong Telecom and Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sejong Telecom and Automobile Pc, you can compare the effects of market volatilities on Sejong Telecom and Automobile 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 Sejong Telecom with a short position of Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sejong Telecom and Automobile.
Diversification Opportunities for Sejong Telecom and Automobile
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sejong and Automobile is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Sejong Telecom and Automobile Pc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automobile Pc and Sejong Telecom 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 Sejong Telecom are associated (or correlated) with Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automobile Pc has no effect on the direction of Sejong Telecom i.e., Sejong Telecom and Automobile go up and down completely randomly.
Pair Corralation between Sejong Telecom and Automobile
Assuming the 90 days trading horizon Sejong Telecom is expected to generate 0.95 times more return on investment than Automobile. However, Sejong Telecom is 1.05 times less risky than Automobile. It trades about 0.04 of its potential returns per unit of risk. Automobile Pc is currently generating about -0.17 per unit of risk. If you would invest 41,200 in Sejong Telecom on December 4, 2024 and sell it today you would earn a total of 300.00 from holding Sejong Telecom or generate 0.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sejong Telecom vs. Automobile Pc
Performance |
| Timeline |
| Sejong Telecom |
| Automobile Pc |
Sejong Telecom and Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sejong Telecom and Automobile
The main advantage of trading using opposite Sejong Telecom and Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sejong Telecom position performs unexpectedly, Automobile 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 Automobile will offset losses from the drop in Automobile's long position.| Sejong Telecom vs. Sam Chun Dang | Sejong Telecom vs. SAMRYOONG CoLtd | Sejong Telecom vs. BYON Co | Sejong Telecom vs. Sangsangin Co |
| Automobile vs. Sangsin Energy Display | Automobile vs. Display Tech Co | Automobile vs. Duksan Hi Metal | Automobile vs. Songwon Industrial Co |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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