Correlation Between Korea Investment and Seojin Automotive
Can any of the company-specific risk be diversified away by investing in both Korea Investment and Seojin Automotive 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 Investment and Seojin Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Investment Holdings and Seojin Automotive CoLtd, you can compare the effects of market volatilities on Korea Investment and Seojin Automotive 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 Investment with a short position of Seojin Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Investment and Seojin Automotive.
Diversification Opportunities for Korea Investment and Seojin Automotive
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Korea and Seojin is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Korea Investment Holdings and Seojin Automotive CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seojin Automotive CoLtd and Korea Investment 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 Investment Holdings are associated (or correlated) with Seojin Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seojin Automotive CoLtd has no effect on the direction of Korea Investment i.e., Korea Investment and Seojin Automotive go up and down completely randomly.
Pair Corralation between Korea Investment and Seojin Automotive
Assuming the 90 days trading horizon Korea Investment Holdings is expected to generate 0.66 times more return on investment than Seojin Automotive. However, Korea Investment Holdings is 1.53 times less risky than Seojin Automotive. It trades about 0.08 of its potential returns per unit of risk. Seojin Automotive CoLtd is currently generating about -0.1 per unit of risk. If you would invest 4,082,811 in Korea Investment Holdings on September 14, 2024 and sell it today you would earn a total of 1,477,189 from holding Korea Investment Holdings or generate 36.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.62% |
| Values | Daily Returns |
Korea Investment Holdings vs. Seojin Automotive CoLtd
Performance |
| Timeline |
| Korea Investment Holdings |
| Seojin Automotive CoLtd |
Korea Investment and Seojin Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Investment and Seojin Automotive
The main advantage of trading using opposite Korea Investment and Seojin Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Investment position performs unexpectedly, Seojin Automotive 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 Seojin Automotive will offset losses from the drop in Seojin Automotive's long position.| Korea Investment vs. Samsung Electronics Co | Korea Investment vs. Samsung Electronics Co | Korea Investment vs. SK Hynix | Korea Investment vs. POSCO Holdings |
| Seojin Automotive vs. Lion Chemtech Co | Seojin Automotive vs. PH Tech Co | Seojin Automotive vs. Jeju Air Co | Seojin Automotive vs. Korea Investment Holdings |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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