Correlation Between Guyoung Technology and Seoam Machinery
Can any of the company-specific risk be diversified away by investing in both Guyoung Technology and Seoam Machinery 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 Guyoung Technology and Seoam Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guyoung Technology Co and Seoam Machinery Industry, you can compare the effects of market volatilities on Guyoung Technology and Seoam Machinery 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 Guyoung Technology with a short position of Seoam Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guyoung Technology and Seoam Machinery.
Diversification Opportunities for Guyoung Technology and Seoam Machinery
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guyoung and Seoam is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Guyoung Technology Co and Seoam Machinery Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoam Machinery Industry and Guyoung Technology 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 Guyoung Technology Co are associated (or correlated) with Seoam Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoam Machinery Industry has no effect on the direction of Guyoung Technology i.e., Guyoung Technology and Seoam Machinery go up and down completely randomly.
Pair Corralation between Guyoung Technology and Seoam Machinery
Assuming the 90 days trading horizon Guyoung Technology Co is expected to generate 0.83 times more return on investment than Seoam Machinery. However, Guyoung Technology Co is 1.21 times less risky than Seoam Machinery. It trades about 0.02 of its potential returns per unit of risk. Seoam Machinery Industry is currently generating about -0.05 per unit of risk. If you would invest 235,165 in Guyoung Technology Co on October 26, 2024 and sell it today you would earn a total of 1,335 from holding Guyoung Technology Co or generate 0.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guyoung Technology Co vs. Seoam Machinery Industry
Performance |
| Timeline |
| Guyoung Technology |
| Seoam Machinery Industry |
Guyoung Technology and Seoam Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guyoung Technology and Seoam Machinery
The main advantage of trading using opposite Guyoung Technology and Seoam Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guyoung Technology position performs unexpectedly, Seoam Machinery 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 Seoam Machinery will offset losses from the drop in Seoam Machinery's long position.| Guyoung Technology vs. Daesung Hi Tech Co | Guyoung Technology vs. PNC Technologies co | Guyoung Technology vs. Lotte Chilsung Beverage | Guyoung Technology vs. A Tech Solution Co |
| Seoam Machinery vs. LEENO Industrial | Seoam Machinery vs. DRB Industrial Co | Seoam Machinery vs. Guyoung Technology Co | Seoam Machinery vs. Automobile Pc |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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