Correlation Between KPX Green and Seoul Semiconductor
Can any of the company-specific risk be diversified away by investing in both KPX Green and Seoul Semiconductor 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 KPX Green and Seoul Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KPX Green Chemical and Seoul Semiconductor Co, you can compare the effects of market volatilities on KPX Green and Seoul Semiconductor 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 KPX Green with a short position of Seoul Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of KPX Green and Seoul Semiconductor.
Diversification Opportunities for KPX Green and Seoul Semiconductor
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KPX and Seoul is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding KPX Green Chemical and Seoul Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Semiconductor and KPX Green 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 KPX Green Chemical are associated (or correlated) with Seoul Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Semiconductor has no effect on the direction of KPX Green i.e., KPX Green and Seoul Semiconductor go up and down completely randomly.
Pair Corralation between KPX Green and Seoul Semiconductor
Assuming the 90 days trading horizon KPX Green Chemical is expected to generate 1.53 times more return on investment than Seoul Semiconductor. However, KPX Green is 1.53 times more volatile than Seoul Semiconductor Co. It trades about 0.02 of its potential returns per unit of risk. Seoul Semiconductor Co is currently generating about -0.05 per unit of risk. If you would invest 692,465 in KPX Green Chemical on November 7, 2024 and sell it today you would earn a total of 20,535 from holding KPX Green Chemical or generate 2.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KPX Green Chemical vs. Seoul Semiconductor Co
Performance |
| Timeline |
| KPX Green Chemical |
| Seoul Semiconductor |
KPX Green and Seoul Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KPX Green and Seoul Semiconductor
The main advantage of trading using opposite KPX Green and Seoul Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KPX Green position performs unexpectedly, Seoul Semiconductor 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 Semiconductor will offset losses from the drop in Seoul Semiconductor's long position.| KPX Green vs. Heungkuk Metaltech CoLtd | KPX Green vs. Pureun Mutual Savings | KPX Green vs. Seoyon Topmetal Co | KPX Green vs. DB Insurance Co |
| Seoul Semiconductor vs. Samsung Electronics Co | Seoul Semiconductor vs. Samsung Electronics Co | Seoul Semiconductor vs. Hyundai Motor Co | Seoul Semiconductor 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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