Correlation Between AeroSpace Technology and Seoul Food
Can any of the company-specific risk be diversified away by investing in both AeroSpace Technology and Seoul Food 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 AeroSpace Technology and Seoul Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AeroSpace Technology of and Seoul Food Industrial, you can compare the effects of market volatilities on AeroSpace Technology and Seoul Food 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 AeroSpace Technology with a short position of Seoul Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of AeroSpace Technology and Seoul Food.
Diversification Opportunities for AeroSpace Technology and Seoul Food
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between AeroSpace and Seoul is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding AeroSpace Technology of and Seoul Food Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Food Industrial and AeroSpace 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 AeroSpace Technology of are associated (or correlated) with Seoul Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Food Industrial has no effect on the direction of AeroSpace Technology i.e., AeroSpace Technology and Seoul Food go up and down completely randomly.
Pair Corralation between AeroSpace Technology and Seoul Food
Assuming the 90 days trading horizon AeroSpace Technology of is expected to generate 4.41 times more return on investment than Seoul Food. However, AeroSpace Technology is 4.41 times more volatile than Seoul Food Industrial. It trades about 0.8 of its potential returns per unit of risk. Seoul Food Industrial is currently generating about -0.11 per unit of risk. If you would invest 50,400 in AeroSpace Technology of on October 31, 2024 and sell it today you would earn a total of 25,700 from holding AeroSpace Technology of or generate 50.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AeroSpace Technology of vs. Seoul Food Industrial
Performance |
| Timeline |
| AeroSpace Technology |
| Seoul Food Industrial |
AeroSpace Technology and Seoul Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AeroSpace Technology and Seoul Food
The main advantage of trading using opposite AeroSpace Technology and Seoul Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AeroSpace Technology position performs unexpectedly, Seoul Food 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 Seoul Food will offset losses from the drop in Seoul Food's long position.| AeroSpace Technology vs. TS Investment Corp | AeroSpace Technology vs. CJ Seafood Corp | AeroSpace Technology vs. Haitai Confectionery Foods | AeroSpace Technology vs. NH Investment Securities |
| Seoul Food vs. Automobile Pc | Seoul Food vs. PlayD Co | Seoul Food vs. TK Chemical | Seoul Food vs. Kukdo Chemical 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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