Correlation Between Mobile Appliance and Seoam Machinery
Can any of the company-specific risk be diversified away by investing in both Mobile Appliance and Seoam Machinery 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 Seoam Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mobile Appliance and Seoam Machinery Industry, you can compare the effects of market volatilities on Mobile Appliance and Seoam Machinery 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 Seoam Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobile Appliance and Seoam Machinery.
Diversification Opportunities for Mobile Appliance and Seoam Machinery
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mobile and Seoam is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Mobile Appliance and Seoam Machinery Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoam Machinery Industry 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 Seoam Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoam Machinery Industry has no effect on the direction of Mobile Appliance i.e., Mobile Appliance and Seoam Machinery go up and down completely randomly.
Pair Corralation between Mobile Appliance and Seoam Machinery
Assuming the 90 days trading horizon Mobile Appliance is expected to under-perform the Seoam Machinery. In addition to that, Mobile Appliance is 1.09 times more volatile than Seoam Machinery Industry. It trades about -0.01 of its total potential returns per unit of risk. Seoam Machinery Industry is currently generating about 0.0 per unit of volatility. If you would invest 424,782 in Seoam Machinery Industry on October 14, 2024 and sell it today you would lose (41,282) from holding Seoam Machinery Industry or give up 9.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mobile Appliance vs. Seoam Machinery Industry
Performance |
| Timeline |
| Mobile Appliance |
| Seoam Machinery Industry |
Mobile Appliance and Seoam Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mobile Appliance and Seoam Machinery
The main advantage of trading using opposite Mobile Appliance and Seoam Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobile Appliance position performs unexpectedly, Seoam Machinery 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 Seoam Machinery will offset losses from the drop in Seoam Machinery's long position.| Mobile Appliance vs. Eagle Veterinary Technology | Mobile Appliance vs. Woori Technology | Mobile Appliance vs. Ilji Technology Co | Mobile Appliance vs. Hana Financial |
| Seoam Machinery vs. Hwasung Industrial Co | Seoam Machinery vs. Nable Communications | Seoam Machinery vs. Mobile Appliance | Seoam Machinery vs. Innowireless 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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