Correlation Between INtRON Biotechnology and SEOWONINTECHCoLtd
Can any of the company-specific risk be diversified away by investing in both INtRON Biotechnology 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 INtRON Biotechnology and SEOWONINTECHCoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iNtRON Biotechnology and SEOWONINTECHCoLtd, you can compare the effects of market volatilities on INtRON Biotechnology 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 INtRON Biotechnology with a short position of SEOWONINTECHCoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of INtRON Biotechnology and SEOWONINTECHCoLtd.
Diversification Opportunities for INtRON Biotechnology and SEOWONINTECHCoLtd
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between INtRON and SEOWONINTECHCoLtd is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding iNtRON Biotechnology and SEOWONINTECHCoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEOWONINTECHCoLtd and INtRON Biotechnology 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 iNtRON Biotechnology 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 INtRON Biotechnology i.e., INtRON Biotechnology and SEOWONINTECHCoLtd go up and down completely randomly.
Pair Corralation between INtRON Biotechnology and SEOWONINTECHCoLtd
Assuming the 90 days trading horizon iNtRON Biotechnology is expected to generate 2.48 times more return on investment than SEOWONINTECHCoLtd. However, INtRON Biotechnology is 2.48 times more volatile than SEOWONINTECHCoLtd. It trades about -0.12 of its potential returns per unit of risk. SEOWONINTECHCoLtd is currently generating about -0.34 per unit of risk. If you would invest 592,000 in iNtRON Biotechnology on November 7, 2024 and sell it today you would lose (23,000) from holding iNtRON Biotechnology or give up 3.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
iNtRON Biotechnology vs. SEOWONINTECHCoLtd
Performance |
| Timeline |
| iNtRON Biotechnology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SEOWONINTECHCoLtd |
INtRON Biotechnology and SEOWONINTECHCoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INtRON Biotechnology and SEOWONINTECHCoLtd
The main advantage of trading using opposite INtRON Biotechnology and SEOWONINTECHCoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INtRON Biotechnology 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.The idea behind iNtRON Biotechnology and SEOWONINTECHCoLtd 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.| SEOWONINTECHCoLtd vs. Neungyule Education | SEOWONINTECHCoLtd vs. Orbitech Co | SEOWONINTECHCoLtd vs. Dongbang Transport Logistics | SEOWONINTECHCoLtd vs. Seoul Electronics Telecom |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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