Correlation Between Mobile Appliance and Sejong Telecom
Can any of the company-specific risk be diversified away by investing in both Mobile Appliance and Sejong Telecom 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 Mobile Appliance and Sejong Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mobile Appliance and Sejong Telecom, you can compare the effects of market volatilities on Mobile Appliance and Sejong Telecom 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 Mobile Appliance with a short position of Sejong Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobile Appliance and Sejong Telecom.
Diversification Opportunities for Mobile Appliance and Sejong Telecom
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mobile and Sejong is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Mobile Appliance and Sejong Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sejong Telecom and Mobile Appliance 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 Mobile Appliance are associated (or correlated) with Sejong Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sejong Telecom has no effect on the direction of Mobile Appliance i.e., Mobile Appliance and Sejong Telecom go up and down completely randomly.
Pair Corralation between Mobile Appliance and Sejong Telecom
Assuming the 90 days trading horizon Mobile Appliance is expected to generate 0.94 times more return on investment than Sejong Telecom. However, Mobile Appliance is 1.06 times less risky than Sejong Telecom. It trades about -0.03 of its potential returns per unit of risk. Sejong Telecom is currently generating about -0.04 per unit of risk. If you would invest 300,500 in Mobile Appliance on September 14, 2024 and sell it today you would lose (101,400) from holding Mobile Appliance or give up 33.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.4% |
| Values | Daily Returns |
Mobile Appliance vs. Sejong Telecom
Performance |
| Timeline |
| Mobile Appliance |
| Sejong Telecom |
Mobile Appliance and Sejong Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mobile Appliance and Sejong Telecom
The main advantage of trading using opposite Mobile Appliance and Sejong Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobile Appliance position performs unexpectedly, Sejong Telecom 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 Sejong Telecom will offset losses from the drop in Sejong Telecom's long position.| Mobile Appliance vs. Samsung Electronics Co | Mobile Appliance vs. Samsung Electronics Co | Mobile Appliance vs. LG Energy Solution | Mobile Appliance vs. SK Hynix |
| Sejong Telecom vs. YG Entertainment | Sejong Telecom vs. JYP Entertainment | Sejong Telecom vs. Cube Entertainment | Sejong Telecom vs. FNC Entertainment 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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