Correlation Between Mobile Appliance and Seah Steel
Can any of the company-specific risk be diversified away by investing in both Mobile Appliance 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 Mobile Appliance and Seah Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mobile Appliance and Seah Steel Corp, you can compare the effects of market volatilities on Mobile Appliance 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 Mobile Appliance with a short position of Seah Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobile Appliance and Seah Steel.
Diversification Opportunities for Mobile Appliance and Seah Steel
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mobile and Seah is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Mobile Appliance 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 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 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 Mobile Appliance i.e., Mobile Appliance and Seah Steel go up and down completely randomly.
Pair Corralation between Mobile Appliance and Seah Steel
Assuming the 90 days trading horizon Mobile Appliance is expected to under-perform the Seah Steel. But the stock apears to be less risky and, when comparing its historical volatility, Mobile Appliance is 1.54 times less risky than Seah Steel. The stock trades about -0.19 of its potential returns per unit of risk. The Seah Steel Corp is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 13,790,000 in Seah Steel Corp on November 29, 2024 and sell it today you would earn a total of 2,240,000 from holding Seah Steel Corp or generate 16.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mobile Appliance vs. Seah Steel Corp
Performance |
| Timeline |
| Mobile Appliance |
| Seah Steel Corp |
Mobile Appliance and Seah Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mobile Appliance and Seah Steel
The main advantage of trading using opposite Mobile Appliance and Seah Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobile Appliance 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.| Mobile Appliance vs. Sung Bo Chemicals | Mobile Appliance vs. Hana Materials | Mobile Appliance vs. Miwon Chemicals Co | Mobile Appliance vs. Ssangyong Materials Corp |
| Seah Steel vs. SV Investment | Seah Steel vs. Worldex Industry Trading | Seah Steel vs. Atinum Investment Co | Seah Steel vs. Daelim Trading 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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