Correlation Between EO Technics and Seoul Semiconductor
Can any of the company-specific risk be diversified away by investing in both EO Technics 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 EO Technics and Seoul Semiconductor 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 Seoul Semiconductor Co, you can compare the effects of market volatilities on EO Technics 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 EO Technics with a short position of Seoul Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of EO Technics and Seoul Semiconductor.
Diversification Opportunities for EO Technics and Seoul Semiconductor
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 039030 and Seoul is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding EO Technics 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 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 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 EO Technics i.e., EO Technics and Seoul Semiconductor go up and down completely randomly.
Pair Corralation between EO Technics and Seoul Semiconductor
Assuming the 90 days trading horizon EO Technics Co is expected to generate 1.26 times more return on investment than Seoul Semiconductor. However, EO Technics is 1.26 times more volatile than Seoul Semiconductor Co. It trades about -0.09 of its potential returns per unit of risk. Seoul Semiconductor Co is currently generating about -0.14 per unit of risk. If you would invest 16,770,000 in EO Technics Co on August 29, 2024 and sell it today you would lose (3,830,000) from holding EO Technics Co or give up 22.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.31% |
| Values | Daily Returns |
EO Technics Co vs. Seoul Semiconductor Co
Performance |
| Timeline |
| EO Technics |
| Seoul Semiconductor |
EO Technics and Seoul Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EO Technics and Seoul Semiconductor
The main advantage of trading using opposite EO Technics and Seoul Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EO Technics 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.| EO Technics vs. Daou Data Corp | EO Technics vs. Busan Industrial Co | EO Technics vs. Busan Ind | EO Technics vs. Shinhan WTI Futures |
| Seoul Semiconductor vs. Daou Data Corp | Seoul Semiconductor vs. Busan Industrial Co | Seoul Semiconductor vs. Busan Ind | Seoul Semiconductor vs. Shinhan WTI Futures |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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