Correlation Between Ecopro and Seah Steel
Can any of the company-specific risk be diversified away by investing in both Ecopro and Seah Steel 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 Ecopro and Seah Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecopro Co and Seah Steel Corp, you can compare the effects of market volatilities on Ecopro and Seah Steel 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 Ecopro with a short position of Seah Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecopro and Seah Steel.
Diversification Opportunities for Ecopro and Seah Steel
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ecopro and Seah is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ecopro Co and Seah Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seah Steel Corp and Ecopro 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 Ecopro Co are associated (or correlated) with Seah Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seah Steel Corp has no effect on the direction of Ecopro i.e., Ecopro and Seah Steel go up and down completely randomly.
Pair Corralation between Ecopro and Seah Steel
Assuming the 90 days trading horizon Ecopro Co is expected to under-perform the Seah Steel. In addition to that, Ecopro is 1.24 times more volatile than Seah Steel Corp. It trades about -0.02 of its total potential returns per unit of risk. Seah Steel Corp is currently generating about 0.1 per unit of volatility. If you would invest 16,290,000 in Seah Steel Corp on August 29, 2024 and sell it today you would earn a total of 1,010,000 from holding Seah Steel Corp or generate 6.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecopro Co vs. Seah Steel Corp
Performance |
| Timeline |
| Ecopro |
| Seah Steel Corp |
Ecopro and Seah Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecopro and Seah Steel
The main advantage of trading using opposite Ecopro and Seah Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecopro position performs unexpectedly, Seah Steel 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 Seah Steel will offset losses from the drop in Seah Steel's long position.The idea behind Ecopro Co and Seah Steel Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Seah Steel vs. LB Investment | Seah Steel vs. Polaris Office Corp | Seah Steel vs. Wireless Power Amplifier | Seah Steel vs. SBI Investment KOREA |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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