Correlation Between ICD and SEOJEON ELECTRIC
Can any of the company-specific risk be diversified away by investing in both ICD and SEOJEON ELECTRIC 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 ICD and SEOJEON ELECTRIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICD Co and SEOJEON ELECTRIC MACHINERY, you can compare the effects of market volatilities on ICD and SEOJEON ELECTRIC 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 ICD with a short position of SEOJEON ELECTRIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICD and SEOJEON ELECTRIC.
Diversification Opportunities for ICD and SEOJEON ELECTRIC
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ICD and SEOJEON is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding ICD Co and SEOJEON ELECTRIC MACHINERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEOJEON ELECTRIC MAC and ICD 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 ICD Co are associated (or correlated) with SEOJEON ELECTRIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEOJEON ELECTRIC MAC has no effect on the direction of ICD i.e., ICD and SEOJEON ELECTRIC go up and down completely randomly.
Pair Corralation between ICD and SEOJEON ELECTRIC
Assuming the 90 days trading horizon ICD Co is expected to under-perform the SEOJEON ELECTRIC. But the stock apears to be less risky and, when comparing its historical volatility, ICD Co is 2.08 times less risky than SEOJEON ELECTRIC. The stock trades about -0.19 of its potential returns per unit of risk. The SEOJEON ELECTRIC MACHINERY is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 630,000 in SEOJEON ELECTRIC MACHINERY on September 2, 2024 and sell it today you would lose (183,000) from holding SEOJEON ELECTRIC MACHINERY or give up 29.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICD Co vs. SEOJEON ELECTRIC MACHINERY
Performance |
| Timeline |
| ICD Co |
| SEOJEON ELECTRIC MAC |
ICD and SEOJEON ELECTRIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICD and SEOJEON ELECTRIC
The main advantage of trading using opposite ICD and SEOJEON ELECTRIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICD position performs unexpectedly, SEOJEON ELECTRIC 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 SEOJEON ELECTRIC will offset losses from the drop in SEOJEON ELECTRIC's long position.| ICD vs. SFA Engineering | ICD vs. APS Holdings | ICD vs. Soulbrain Holdings Co | ICD vs. JUSUNG ENGINEERING Co |
| SEOJEON ELECTRIC vs. Korea New Network | SEOJEON ELECTRIC vs. ICD Co | SEOJEON ELECTRIC vs. DYPNF CoLtd | SEOJEON ELECTRIC vs. Busan Industrial 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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