Correlation Between SEOWONINTECHCoLtd and Daewoo Electronic
Can any of the company-specific risk be diversified away by investing in both SEOWONINTECHCoLtd and Daewoo Electronic 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 SEOWONINTECHCoLtd and Daewoo Electronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEOWONINTECHCoLtd and Daewoo Electronic Components, you can compare the effects of market volatilities on SEOWONINTECHCoLtd and Daewoo Electronic 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 SEOWONINTECHCoLtd with a short position of Daewoo Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEOWONINTECHCoLtd and Daewoo Electronic.
Diversification Opportunities for SEOWONINTECHCoLtd and Daewoo Electronic
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SEOWONINTECHCoLtd and Daewoo is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding SEOWONINTECHCoLtd and Daewoo Electronic Components in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewoo Electronic and SEOWONINTECHCoLtd 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 SEOWONINTECHCoLtd are associated (or correlated) with Daewoo Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewoo Electronic has no effect on the direction of SEOWONINTECHCoLtd i.e., SEOWONINTECHCoLtd and Daewoo Electronic go up and down completely randomly.
Pair Corralation between SEOWONINTECHCoLtd and Daewoo Electronic
Assuming the 90 days trading horizon SEOWONINTECHCoLtd is expected to generate 1.42 times more return on investment than Daewoo Electronic. However, SEOWONINTECHCoLtd is 1.42 times more volatile than Daewoo Electronic Components. It trades about 0.22 of its potential returns per unit of risk. Daewoo Electronic Components is currently generating about -0.08 per unit of risk. If you would invest 525,558 in SEOWONINTECHCoLtd on October 12, 2024 and sell it today you would earn a total of 22,442 from holding SEOWONINTECHCoLtd or generate 4.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEOWONINTECHCoLtd vs. Daewoo Electronic Components
Performance |
| Timeline |
| SEOWONINTECHCoLtd |
| Daewoo Electronic |
SEOWONINTECHCoLtd and Daewoo Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEOWONINTECHCoLtd and Daewoo Electronic
The main advantage of trading using opposite SEOWONINTECHCoLtd and Daewoo Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEOWONINTECHCoLtd position performs unexpectedly, Daewoo Electronic 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 Daewoo Electronic will offset losses from the drop in Daewoo Electronic's long position.| SEOWONINTECHCoLtd vs. KMH Hitech Co | SEOWONINTECHCoLtd vs. GemVaxKAEL CoLtd | SEOWONINTECHCoLtd vs. Bosung Power Technology | SEOWONINTECHCoLtd vs. Busan Industrial Co |
| Daewoo Electronic vs. Hwangkum Steel Technology | Daewoo Electronic vs. SEOWONINTECHCoLtd | Daewoo Electronic vs. LS Materials | Daewoo Electronic vs. Sungchang Autotech 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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