Correlation Between Seoul Semiconductor and QUALITAS SEMICONDUCTOR
Can any of the company-specific risk be diversified away by investing in both Seoul Semiconductor and QUALITAS 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 Seoul Semiconductor and QUALITAS SEMICONDUCTOR 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 QUALITAS SEMICONDUCTOR LTD, you can compare the effects of market volatilities on Seoul Semiconductor and QUALITAS 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 Seoul Semiconductor with a short position of QUALITAS SEMICONDUCTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Semiconductor and QUALITAS SEMICONDUCTOR.
Diversification Opportunities for Seoul Semiconductor and QUALITAS SEMICONDUCTOR
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seoul and QUALITAS is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Semiconductor Co and QUALITAS SEMICONDUCTOR LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QUALITAS SEMICONDUCTOR 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 QUALITAS SEMICONDUCTOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QUALITAS SEMICONDUCTOR has no effect on the direction of Seoul Semiconductor i.e., Seoul Semiconductor and QUALITAS SEMICONDUCTOR go up and down completely randomly.
Pair Corralation between Seoul Semiconductor and QUALITAS SEMICONDUCTOR
Assuming the 90 days trading horizon Seoul Semiconductor Co is expected to generate 0.77 times more return on investment than QUALITAS SEMICONDUCTOR. However, Seoul Semiconductor Co is 1.3 times less risky than QUALITAS SEMICONDUCTOR. It trades about -0.37 of its potential returns per unit of risk. QUALITAS SEMICONDUCTOR LTD is currently generating about -0.47 per unit of risk. If you would invest 936,000 in Seoul Semiconductor Co on August 24, 2024 and sell it today you would lose (176,000) from holding Seoul Semiconductor Co or give up 18.8% 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. QUALITAS SEMICONDUCTOR LTD
Performance |
| Timeline |
| Seoul Semiconductor |
| QUALITAS SEMICONDUCTOR |
Seoul Semiconductor and QUALITAS SEMICONDUCTOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Semiconductor and QUALITAS SEMICONDUCTOR
The main advantage of trading using opposite Seoul Semiconductor and QUALITAS SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Semiconductor position performs unexpectedly, QUALITAS 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 QUALITAS SEMICONDUCTOR will offset losses from the drop in QUALITAS SEMICONDUCTOR's long position.The idea behind Seoul Semiconductor Co and QUALITAS SEMICONDUCTOR LTD pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| QUALITAS SEMICONDUCTOR vs. Samsung Electronics Co | QUALITAS SEMICONDUCTOR vs. Samsung Electronics Co | QUALITAS SEMICONDUCTOR vs. LG Energy Solution | QUALITAS SEMICONDUCTOR vs. SK Hynix |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |