Correlation Between Sejong Telecom and Display Tech
Can any of the company-specific risk be diversified away by investing in both Sejong Telecom and Display Tech 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 Display Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sejong Telecom and Display Tech Co, you can compare the effects of market volatilities on Sejong Telecom and Display Tech 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 Display Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sejong Telecom and Display Tech.
Diversification Opportunities for Sejong Telecom and Display Tech
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sejong and Display is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Sejong Telecom and Display Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Display Tech 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 Display Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Display Tech has no effect on the direction of Sejong Telecom i.e., Sejong Telecom and Display Tech go up and down completely randomly.
Pair Corralation between Sejong Telecom and Display Tech
Assuming the 90 days trading horizon Sejong Telecom is expected to under-perform the Display Tech. But the stock apears to be less risky and, when comparing its historical volatility, Sejong Telecom is 3.8 times less risky than Display Tech. The stock trades about -0.18 of its potential returns per unit of risk. The Display Tech Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 296,000 in Display Tech Co on November 8, 2024 and sell it today you would earn a total of 13,000 from holding Display Tech Co or generate 4.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sejong Telecom vs. Display Tech Co
Performance |
| Timeline |
| Sejong Telecom |
| Display Tech |
Sejong Telecom and Display Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sejong Telecom and Display Tech
The main advantage of trading using opposite Sejong Telecom and Display Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sejong Telecom position performs unexpectedly, Display Tech 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 Display Tech will offset losses from the drop in Display Tech's long position.| Sejong Telecom vs. Com2uS | Sejong Telecom vs. Kakao Games Corp | Sejong Telecom vs. Busan Industrial Co | Sejong Telecom vs. Busan Ind |
| Display Tech vs. Lotte Non Life Insurance | Display Tech vs. Shinhan Financial Group | Display Tech vs. KB Financial Group | Display Tech vs. Samyang Foods 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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