Correlation Between Korea New and SEOJEON ELECTRIC
Can any of the company-specific risk be diversified away by investing in both Korea New and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC 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 SEOJEON ELECTRIC MACHINERY, you can compare the effects of market volatilities on Korea New and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea New and SEOJEON ELECTRIC.
Diversification Opportunities for Korea New and SEOJEON ELECTRIC
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korea and SEOJEON is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Korea New Network and SEOJEON ELECTRIC MACHINERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEOJEON ELECTRIC MAC 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 SEOJEON ELECTRIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEOJEON ELECTRIC MAC has no effect on the direction of Korea New i.e., Korea New and SEOJEON ELECTRIC go up and down completely randomly.
Pair Corralation between Korea New and SEOJEON ELECTRIC
Assuming the 90 days trading horizon Korea New Network is expected to under-perform the SEOJEON ELECTRIC. But the stock apears to be less risky and, when comparing its historical volatility, Korea New Network is 1.77 times less risky than SEOJEON ELECTRIC. The stock trades about -0.01 of its potential returns per unit of risk. The SEOJEON ELECTRIC MACHINERY is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 620,000 in SEOJEON ELECTRIC MACHINERY on August 31, 2024 and sell it today you would lose (163,000) from holding SEOJEON ELECTRIC MACHINERY or give up 26.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Korea New Network vs. SEOJEON ELECTRIC MACHINERY
Performance |
| Timeline |
| Korea New Network |
| SEOJEON ELECTRIC MAC |
Korea New and SEOJEON ELECTRIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea New and SEOJEON ELECTRIC
The main advantage of trading using opposite Korea New and SEOJEON ELECTRIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea New position performs unexpectedly, SEOJEON ELECTRIC 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 SEOJEON ELECTRIC will offset losses from the drop in SEOJEON ELECTRIC's long position.| Korea New vs. Ilji Technology Co | Korea New vs. Raontech | Korea New vs. HB Technology TD | Korea New vs. Koh Young Technology |
| SEOJEON ELECTRIC vs. Korea New Network | SEOJEON ELECTRIC vs. ICD Co | SEOJEON ELECTRIC vs. DYPNF CoLtd | SEOJEON ELECTRIC vs. Busan Industrial Co |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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