Correlation Between EO Technics and SFA Semicon
Can any of the company-specific risk be diversified away by investing in both EO Technics and SFA Semicon 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 EO Technics and SFA Semicon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EO Technics Co and SFA Semicon Co, you can compare the effects of market volatilities on EO Technics and SFA Semicon 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 EO Technics with a short position of SFA Semicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of EO Technics and SFA Semicon.
Diversification Opportunities for EO Technics and SFA Semicon
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 039030 and SFA is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding EO Technics Co and SFA Semicon Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFA Semicon and EO Technics 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 EO Technics Co are associated (or correlated) with SFA Semicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SFA Semicon has no effect on the direction of EO Technics i.e., EO Technics and SFA Semicon go up and down completely randomly.
Pair Corralation between EO Technics and SFA Semicon
Assuming the 90 days trading horizon EO Technics Co is expected to generate 1.36 times more return on investment than SFA Semicon. However, EO Technics is 1.36 times more volatile than SFA Semicon Co. It trades about 0.01 of its potential returns per unit of risk. SFA Semicon Co is currently generating about -0.04 per unit of risk. If you would invest 14,491,800 in EO Technics Co on August 29, 2024 and sell it today you would lose (1,551,800) from holding EO Technics Co or give up 10.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EO Technics Co vs. SFA Semicon Co
Performance |
| Timeline |
| EO Technics |
| SFA Semicon |
EO Technics and SFA Semicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EO Technics and SFA Semicon
The main advantage of trading using opposite EO Technics and SFA Semicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EO Technics position performs unexpectedly, SFA Semicon 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 SFA Semicon will offset losses from the drop in SFA Semicon's long position.| EO Technics vs. Daou Data Corp | EO Technics vs. Busan Industrial Co | EO Technics vs. Busan Ind | EO Technics vs. Shinhan WTI Futures |
| SFA Semicon vs. SFA Engineering | SFA Semicon vs. Nepes | SFA Semicon vs. LEENO Industrial | SFA Semicon vs. Seoul Semiconductor 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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