Correlation Between Korea Information and SeAH Besteel
Can any of the company-specific risk be diversified away by investing in both Korea Information and SeAH Besteel 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 Korea Information and SeAH Besteel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Information Engineering and SeAH Besteel Corp, you can compare the effects of market volatilities on Korea Information and SeAH Besteel 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 Korea Information with a short position of SeAH Besteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and SeAH Besteel.
Diversification Opportunities for Korea Information and SeAH Besteel
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and SeAH is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Engineering and SeAH Besteel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SeAH Besteel Corp and Korea Information 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 Korea Information Engineering are associated (or correlated) with SeAH Besteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SeAH Besteel Corp has no effect on the direction of Korea Information i.e., Korea Information and SeAH Besteel go up and down completely randomly.
Pair Corralation between Korea Information and SeAH Besteel
Assuming the 90 days trading horizon Korea Information Engineering is expected to generate 1.05 times more return on investment than SeAH Besteel. However, Korea Information is 1.05 times more volatile than SeAH Besteel Corp. It trades about 0.05 of its potential returns per unit of risk. SeAH Besteel Corp is currently generating about 0.04 per unit of risk. If you would invest 255,000 in Korea Information Engineering on November 7, 2024 and sell it today you would earn a total of 3,000 from holding Korea Information Engineering or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.89% |
| Values | Daily Returns |
Korea Information Engineering vs. SeAH Besteel Corp
Performance |
| Timeline |
| Korea Information |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SeAH Besteel Corp |
Korea Information and SeAH Besteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and SeAH Besteel
The main advantage of trading using opposite Korea Information and SeAH Besteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information position performs unexpectedly, SeAH Besteel 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 SeAH Besteel will offset losses from the drop in SeAH Besteel's long position.| Korea Information vs. Jeju Bank | Korea Information vs. PNC Technologies co | Korea Information vs. Polaris Office Corp | Korea Information vs. PH 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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