Correlation Between ENERGYMACHINERY KOREA and Semyung Electric
Can any of the company-specific risk be diversified away by investing in both ENERGYMACHINERY KOREA and Semyung Electric 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 ENERGYMACHINERY KOREA and Semyung Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENERGYMACHINERY KOREA CoLtd and Semyung Electric Machinery, you can compare the effects of market volatilities on ENERGYMACHINERY KOREA and Semyung Electric 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 ENERGYMACHINERY KOREA with a short position of Semyung Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENERGYMACHINERY KOREA and Semyung Electric.
Diversification Opportunities for ENERGYMACHINERY KOREA and Semyung Electric
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ENERGYMACHINERY and Semyung is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding ENERGYMACHINERY KOREA CoLtd and Semyung Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semyung Electric Mac and ENERGYMACHINERY KOREA 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 ENERGYMACHINERY KOREA CoLtd are associated (or correlated) with Semyung Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semyung Electric Mac has no effect on the direction of ENERGYMACHINERY KOREA i.e., ENERGYMACHINERY KOREA and Semyung Electric go up and down completely randomly.
Pair Corralation between ENERGYMACHINERY KOREA and Semyung Electric
Assuming the 90 days trading horizon ENERGYMACHINERY KOREA CoLtd is expected to under-perform the Semyung Electric. But the stock apears to be less risky and, when comparing its historical volatility, ENERGYMACHINERY KOREA CoLtd is 1.56 times less risky than Semyung Electric. The stock trades about -0.01 of its potential returns per unit of risk. The Semyung Electric Machinery is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 288,653 in Semyung Electric Machinery on November 27, 2024 and sell it today you would earn a total of 268,347 from holding Semyung Electric Machinery or generate 92.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENERGYMACHINERY KOREA CoLtd vs. Semyung Electric Machinery
Performance |
| Timeline |
| ENERGYMACHINERY KOREA |
| Semyung Electric Mac |
ENERGYMACHINERY KOREA and Semyung Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENERGYMACHINERY KOREA and Semyung Electric
The main advantage of trading using opposite ENERGYMACHINERY KOREA and Semyung Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENERGYMACHINERY KOREA position performs unexpectedly, Semyung Electric 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 Semyung Electric will offset losses from the drop in Semyung Electric's long position.| ENERGYMACHINERY KOREA vs. Busan Industrial Co | ENERGYMACHINERY KOREA vs. Busan Ind | ENERGYMACHINERY KOREA vs. Mirae Asset Daewoo | ENERGYMACHINERY KOREA vs. UNISEM Co |
| Semyung Electric vs. Dongbang Transport Logistics | Semyung Electric vs. Daejung Chemicals Metals | Semyung Electric vs. Daiyang Metal Co | Semyung Electric vs. DONGKUK TED METAL |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |