Correlation Between Sejong Telecom and ChipsMedia
Can any of the company-specific risk be diversified away by investing in both Sejong Telecom and ChipsMedia 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 ChipsMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sejong Telecom and ChipsMedia, you can compare the effects of market volatilities on Sejong Telecom and ChipsMedia 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 ChipsMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sejong Telecom and ChipsMedia.
Diversification Opportunities for Sejong Telecom and ChipsMedia
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sejong and ChipsMedia is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sejong Telecom and ChipsMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChipsMedia 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 ChipsMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChipsMedia has no effect on the direction of Sejong Telecom i.e., Sejong Telecom and ChipsMedia go up and down completely randomly.
Pair Corralation between Sejong Telecom and ChipsMedia
Assuming the 90 days trading horizon Sejong Telecom is expected to under-perform the ChipsMedia. But the stock apears to be less risky and, when comparing its historical volatility, Sejong Telecom is 2.58 times less risky than ChipsMedia. The stock trades about -0.36 of its potential returns per unit of risk. The ChipsMedia is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,307,000 in ChipsMedia on September 13, 2024 and sell it today you would lose (17,000) from holding ChipsMedia or give up 1.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sejong Telecom vs. ChipsMedia
Performance |
| Timeline |
| Sejong Telecom |
| ChipsMedia |
Sejong Telecom and ChipsMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sejong Telecom and ChipsMedia
The main advantage of trading using opposite Sejong Telecom and ChipsMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sejong Telecom position performs unexpectedly, ChipsMedia 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 ChipsMedia will offset losses from the drop in ChipsMedia's long position.| Sejong Telecom vs. Sam Chun Dang | Sejong Telecom vs. SAMRYOONG CoLtd | Sejong Telecom vs. BYON Co | Sejong Telecom vs. Sangsangin Co |
| ChipsMedia vs. Lake Materials Co | ChipsMedia vs. Union Materials Corp | ChipsMedia vs. Ecoplastic | ChipsMedia vs. EV Advanced Material |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |