Correlation Between KT Submarine and Sebo Manufacturing
Can any of the company-specific risk be diversified away by investing in both KT Submarine and Sebo Manufacturing 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 KT Submarine and Sebo Manufacturing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KT Submarine Co and Sebo Manufacturing Engineering, you can compare the effects of market volatilities on KT Submarine and Sebo Manufacturing 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 KT Submarine with a short position of Sebo Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of KT Submarine and Sebo Manufacturing.
Diversification Opportunities for KT Submarine and Sebo Manufacturing
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 060370 and Sebo is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding KT Submarine Co and Sebo Manufacturing Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sebo Manufacturing and KT Submarine 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 KT Submarine Co are associated (or correlated) with Sebo Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sebo Manufacturing has no effect on the direction of KT Submarine i.e., KT Submarine and Sebo Manufacturing go up and down completely randomly.
Pair Corralation between KT Submarine and Sebo Manufacturing
Assuming the 90 days trading horizon KT Submarine Co is expected to under-perform the Sebo Manufacturing. But the stock apears to be less risky and, when comparing its historical volatility, KT Submarine Co is 1.03 times less risky than Sebo Manufacturing. The stock trades about -0.62 of its potential returns per unit of risk. The Sebo Manufacturing Engineering is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 965,000 in Sebo Manufacturing Engineering on August 24, 2024 and sell it today you would earn a total of 107,000 from holding Sebo Manufacturing Engineering or generate 11.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KT Submarine Co vs. Sebo Manufacturing Engineering
Performance |
| Timeline |
| KT Submarine |
| Sebo Manufacturing |
KT Submarine and Sebo Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KT Submarine and Sebo Manufacturing
The main advantage of trading using opposite KT Submarine and Sebo Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KT Submarine position performs unexpectedly, Sebo Manufacturing 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 Sebo Manufacturing will offset losses from the drop in Sebo Manufacturing's long position.| KT Submarine vs. ABOV Semiconductor Co | KT Submarine vs. Samlip General Foods | KT Submarine vs. Koryo Credit Information | KT Submarine vs. BNK Financial Group |
| Sebo Manufacturing vs. Samsung Electronics Co | Sebo Manufacturing vs. Samsung Electronics Co | Sebo Manufacturing vs. Hyundai Motor Co | Sebo Manufacturing vs. Hyundai Motor |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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