Correlation Between Seegene and Daewon Media
Can any of the company-specific risk be diversified away by investing in both Seegene and Daewon Media 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 Seegene and Daewon Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seegene and Daewon Media Co, you can compare the effects of market volatilities on Seegene and Daewon Media 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 Seegene with a short position of Daewon Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seegene and Daewon Media.
Diversification Opportunities for Seegene and Daewon Media
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seegene and Daewon is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Seegene and Daewon Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewon Media and Seegene 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 Seegene are associated (or correlated) with Daewon Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewon Media has no effect on the direction of Seegene i.e., Seegene and Daewon Media go up and down completely randomly.
Pair Corralation between Seegene and Daewon Media
Assuming the 90 days trading horizon Seegene is expected to generate 2.24 times more return on investment than Daewon Media. However, Seegene is 2.24 times more volatile than Daewon Media Co. It trades about 0.03 of its potential returns per unit of risk. Daewon Media Co is currently generating about -0.13 per unit of risk. If you would invest 2,176,550 in Seegene on September 3, 2024 and sell it today you would earn a total of 198,450 from holding Seegene or generate 9.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seegene vs. Daewon Media Co
Performance |
| Timeline |
| Seegene |
| Daewon Media |
Seegene and Daewon Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seegene and Daewon Media
The main advantage of trading using opposite Seegene and Daewon Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seegene position performs unexpectedly, Daewon Media 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 Daewon Media will offset losses from the drop in Daewon Media's long position.The idea behind Seegene and Daewon Media Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Daewon Media vs. Korea New Network | Daewon Media vs. ICD Co | Daewon Media vs. DYPNF CoLtd | Daewon Media vs. Busan Industrial 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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