Correlation Between Seoul Semiconductor and Anam Electronics
Can any of the company-specific risk be diversified away by investing in both Seoul Semiconductor and Anam Electronics 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 Seoul Semiconductor and Anam Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seoul Semiconductor Co and Anam Electronics Co, you can compare the effects of market volatilities on Seoul Semiconductor and Anam Electronics 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 Seoul Semiconductor with a short position of Anam Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Semiconductor and Anam Electronics.
Diversification Opportunities for Seoul Semiconductor and Anam Electronics
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seoul and Anam is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Semiconductor Co and Anam Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anam Electronics and Seoul Semiconductor 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 Seoul Semiconductor Co are associated (or correlated) with Anam Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anam Electronics has no effect on the direction of Seoul Semiconductor i.e., Seoul Semiconductor and Anam Electronics go up and down completely randomly.
Pair Corralation between Seoul Semiconductor and Anam Electronics
Assuming the 90 days trading horizon Seoul Semiconductor Co is expected to under-perform the Anam Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Seoul Semiconductor Co is 1.12 times less risky than Anam Electronics. The stock trades about -0.03 of its potential returns per unit of risk. The Anam Electronics Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 179,000 in Anam Electronics Co on September 12, 2024 and sell it today you would lose (52,600) from holding Anam Electronics Co or give up 29.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoul Semiconductor Co vs. Anam Electronics Co
Performance |
| Timeline |
| Seoul Semiconductor |
| Anam Electronics |
Seoul Semiconductor and Anam Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Semiconductor and Anam Electronics
The main advantage of trading using opposite Seoul Semiconductor and Anam Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Semiconductor position performs unexpectedly, Anam Electronics 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 Anam Electronics will offset losses from the drop in Anam Electronics' long position.| Seoul Semiconductor vs. Cube Entertainment | Seoul Semiconductor vs. Dreamus Company | Seoul Semiconductor vs. LG Energy Solution | Seoul Semiconductor vs. Dongwon System |
| Anam Electronics vs. Samsung Electronics Co | Anam Electronics vs. Samsung Electronics Co | Anam Electronics vs. SK Hynix | Anam Electronics 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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