Correlation Between Soulbrain Holdings and Sewoon Medical
Can any of the company-specific risk be diversified away by investing in both Soulbrain Holdings and Sewoon Medical 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 Sewoon Medical 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 Sewoon Medical Co, you can compare the effects of market volatilities on Soulbrain Holdings and Sewoon Medical 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 Sewoon Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Soulbrain Holdings and Sewoon Medical.
Diversification Opportunities for Soulbrain Holdings and Sewoon Medical
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Soulbrain and Sewoon is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Soulbrain Holdings Co and Sewoon Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sewoon Medical 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 Sewoon Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sewoon Medical has no effect on the direction of Soulbrain Holdings i.e., Soulbrain Holdings and Sewoon Medical go up and down completely randomly.
Pair Corralation between Soulbrain Holdings and Sewoon Medical
Assuming the 90 days trading horizon Soulbrain Holdings Co is expected to generate 3.16 times more return on investment than Sewoon Medical. However, Soulbrain Holdings is 3.16 times more volatile than Sewoon Medical Co. It trades about 0.04 of its potential returns per unit of risk. Sewoon Medical Co is currently generating about 0.0 per unit of risk. If you would invest 2,550,000 in Soulbrain Holdings Co on October 15, 2024 and sell it today you would earn a total of 1,320,000 from holding Soulbrain Holdings Co or generate 51.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Soulbrain Holdings Co vs. Sewoon Medical Co
Performance |
| Timeline |
| Soulbrain Holdings |
| Sewoon Medical |
Soulbrain Holdings and Sewoon Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Soulbrain Holdings and Sewoon Medical
The main advantage of trading using opposite Soulbrain Holdings and Sewoon Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Soulbrain Holdings position performs unexpectedly, Sewoon Medical 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 Sewoon Medical will offset losses from the drop in Sewoon Medical's long position.| Soulbrain Holdings vs. SFA Engineering | Soulbrain Holdings vs. Seoul Semiconductor Co | Soulbrain Holdings vs. Wonik Ips Co |
| Sewoon Medical vs. Mobileleader CoLtd | Sewoon Medical vs. Hannong Chemicals | Sewoon Medical vs. Wireless Power Amplifier | Sewoon Medical vs. Digital Power Communications |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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