Correlation Between Korea New and Sajo Seafood
Can any of the company-specific risk be diversified away by investing in both Korea New and Sajo Seafood 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 Korea New and Sajo Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea New Network and Sajo Seafood, you can compare the effects of market volatilities on Korea New and Sajo Seafood 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 Korea New with a short position of Sajo Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea New and Sajo Seafood.
Diversification Opportunities for Korea New and Sajo Seafood
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and Sajo is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Korea New Network and Sajo Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sajo Seafood and Korea New 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 Korea New Network are associated (or correlated) with Sajo Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sajo Seafood has no effect on the direction of Korea New i.e., Korea New and Sajo Seafood go up and down completely randomly.
Pair Corralation between Korea New and Sajo Seafood
Assuming the 90 days trading horizon Korea New Network is expected to under-perform the Sajo Seafood. In addition to that, Korea New is 1.76 times more volatile than Sajo Seafood. It trades about -0.25 of its total potential returns per unit of risk. Sajo Seafood is currently generating about -0.12 per unit of volatility. If you would invest 472,500 in Sajo Seafood on October 12, 2024 and sell it today you would lose (14,500) from holding Sajo Seafood or give up 3.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea New Network vs. Sajo Seafood
Performance |
| Timeline |
| Korea New Network |
| Sajo Seafood |
Korea New and Sajo Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea New and Sajo Seafood
The main advantage of trading using opposite Korea New and Sajo Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea New position performs unexpectedly, Sajo Seafood 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 Sajo Seafood will offset losses from the drop in Sajo Seafood's long position.| Korea New vs. Wireless Power Amplifier | Korea New vs. Ssangyong Information Communication | Korea New vs. Dongbu Insurance Co | Korea New vs. Digital Power Communications |
| Sajo Seafood vs. PJ Metal Co | Sajo Seafood vs. Kukdo Chemical Co | Sajo Seafood vs. Samick Musical Instruments | Sajo Seafood vs. Jeju Semiconductor Corp |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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