Correlation Between Daewoo Engineering and SEOWONINTECHCoLtd
Can any of the company-specific risk be diversified away by investing in both Daewoo Engineering and SEOWONINTECHCoLtd 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 Daewoo Engineering and SEOWONINTECHCoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daewoo Engineering Construction and SEOWONINTECHCoLtd, you can compare the effects of market volatilities on Daewoo Engineering and SEOWONINTECHCoLtd 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 Daewoo Engineering with a short position of SEOWONINTECHCoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo Engineering and SEOWONINTECHCoLtd.
Diversification Opportunities for Daewoo Engineering and SEOWONINTECHCoLtd
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Daewoo and SEOWONINTECHCoLtd is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo Engineering Constructio and SEOWONINTECHCoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEOWONINTECHCoLtd and Daewoo Engineering 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 Daewoo Engineering Construction are associated (or correlated) with SEOWONINTECHCoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEOWONINTECHCoLtd has no effect on the direction of Daewoo Engineering i.e., Daewoo Engineering and SEOWONINTECHCoLtd go up and down completely randomly.
Pair Corralation between Daewoo Engineering and SEOWONINTECHCoLtd
Assuming the 90 days trading horizon Daewoo Engineering Construction is expected to under-perform the SEOWONINTECHCoLtd. In addition to that, Daewoo Engineering is 1.74 times more volatile than SEOWONINTECHCoLtd. It trades about -0.02 of its total potential returns per unit of risk. SEOWONINTECHCoLtd is currently generating about 0.01 per unit of volatility. If you would invest 515,760 in SEOWONINTECHCoLtd on November 1, 2024 and sell it today you would earn a total of 22,240 from holding SEOWONINTECHCoLtd or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewoo Engineering Constructio vs. SEOWONINTECHCoLtd
Performance |
| Timeline |
| Daewoo Engineering |
| SEOWONINTECHCoLtd |
Daewoo Engineering and SEOWONINTECHCoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo Engineering and SEOWONINTECHCoLtd
The main advantage of trading using opposite Daewoo Engineering and SEOWONINTECHCoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo Engineering position performs unexpectedly, SEOWONINTECHCoLtd 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 SEOWONINTECHCoLtd will offset losses from the drop in SEOWONINTECHCoLtd's long position.| Daewoo Engineering vs. Samsung Electronics Co | Daewoo Engineering vs. Samsung Electronics Co | Daewoo Engineering vs. KB Financial Group | Daewoo Engineering vs. Shinhan Financial Group |
| SEOWONINTECHCoLtd vs. Songwon Industrial Co | SEOWONINTECHCoLtd vs. Pyung Hwa Industrial | SEOWONINTECHCoLtd vs. Woori Technology | SEOWONINTECHCoLtd vs. Global Standard Technology |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |