Correlation Between Soulbrain Holdings and Seoul Semiconductor
Can any of the company-specific risk be diversified away by investing in both Soulbrain Holdings and Seoul Semiconductor 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 Soulbrain Holdings and Seoul Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Soulbrain Holdings Co and Seoul Semiconductor Co, you can compare the effects of market volatilities on Soulbrain Holdings and Seoul Semiconductor 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 Soulbrain Holdings with a short position of Seoul Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Soulbrain Holdings and Seoul Semiconductor.
Diversification Opportunities for Soulbrain Holdings and Seoul Semiconductor
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Soulbrain and Seoul is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Soulbrain Holdings Co and Seoul Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Semiconductor and Soulbrain Holdings 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 Soulbrain Holdings Co are associated (or correlated) with Seoul Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Semiconductor has no effect on the direction of Soulbrain Holdings i.e., Soulbrain Holdings and Seoul Semiconductor go up and down completely randomly.
Pair Corralation between Soulbrain Holdings and Seoul Semiconductor
Assuming the 90 days trading horizon Soulbrain Holdings Co is expected to under-perform the Seoul Semiconductor. In addition to that, Soulbrain Holdings is 2.21 times more volatile than Seoul Semiconductor Co. It trades about -0.05 of its total potential returns per unit of risk. Seoul Semiconductor Co is currently generating about -0.06 per unit of volatility. If you would invest 1,001,000 in Seoul Semiconductor Co on August 25, 2024 and sell it today you would lose (246,000) from holding Seoul Semiconductor Co or give up 24.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Soulbrain Holdings Co vs. Seoul Semiconductor Co
Performance |
| Timeline |
| Soulbrain Holdings |
| Seoul Semiconductor |
Soulbrain Holdings and Seoul Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Soulbrain Holdings and Seoul Semiconductor
The main advantage of trading using opposite Soulbrain Holdings and Seoul Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Soulbrain Holdings position performs unexpectedly, Seoul Semiconductor 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 Seoul Semiconductor will offset losses from the drop in Seoul Semiconductor's long position.| Soulbrain Holdings vs. LG Chemicals | Soulbrain Holdings vs. POSCO Holdings | Soulbrain Holdings vs. Lotte Chemical Corp | Soulbrain Holdings vs. Hyundai Steel |
| Seoul Semiconductor vs. Korea Real Estate | Seoul Semiconductor vs. Korea Ratings Co | Seoul Semiconductor vs. IQuest Co | Seoul Semiconductor vs. Wonbang Tech 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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