Correlation Between Eagle Veterinary and Seoul Food
Can any of the company-specific risk be diversified away by investing in both Eagle Veterinary and Seoul Food 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 Eagle Veterinary and Seoul Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Veterinary Technology and Seoul Food Industrial, you can compare the effects of market volatilities on Eagle Veterinary and Seoul Food 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 Eagle Veterinary with a short position of Seoul Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Veterinary and Seoul Food.
Diversification Opportunities for Eagle Veterinary and Seoul Food
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eagle and Seoul is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Veterinary Technology and Seoul Food Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Food Industrial and Eagle Veterinary 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 Eagle Veterinary Technology are associated (or correlated) with Seoul Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Food Industrial has no effect on the direction of Eagle Veterinary i.e., Eagle Veterinary and Seoul Food go up and down completely randomly.
Pair Corralation between Eagle Veterinary and Seoul Food
Assuming the 90 days trading horizon Eagle Veterinary Technology is expected to under-perform the Seoul Food. In addition to that, Eagle Veterinary is 1.25 times more volatile than Seoul Food Industrial. It trades about -0.06 of its total potential returns per unit of risk. Seoul Food Industrial is currently generating about 0.05 per unit of volatility. If you would invest 14,500 in Seoul Food Industrial on September 13, 2024 and sell it today you would earn a total of 300.00 from holding Seoul Food Industrial or generate 2.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Veterinary Technology vs. Seoul Food Industrial
Performance |
| Timeline |
| Eagle Veterinary Tec |
| Seoul Food Industrial |
Eagle Veterinary and Seoul Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Veterinary and Seoul Food
The main advantage of trading using opposite Eagle Veterinary and Seoul Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Veterinary position performs unexpectedly, Seoul Food 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 Food will offset losses from the drop in Seoul Food's long position.| Eagle Veterinary vs. Kolon Life Science | Eagle Veterinary vs. JETEMA Co | Eagle Veterinary vs. Aminologics CoLtd | Eagle Veterinary vs. HLB Pharmaceutical Co |
| Seoul Food vs. Samsung Electronics Co | Seoul Food vs. Samsung Electronics Co | Seoul Food vs. SK Hynix | Seoul Food vs. POSCO Holdings |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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