Correlation Between Seoam Machinery and Heungkuk Metaltech
Can any of the company-specific risk be diversified away by investing in both Seoam Machinery and Heungkuk Metaltech 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 Seoam Machinery and Heungkuk Metaltech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seoam Machinery Industry and Heungkuk Metaltech CoLtd, you can compare the effects of market volatilities on Seoam Machinery and Heungkuk Metaltech 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 Seoam Machinery with a short position of Heungkuk Metaltech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoam Machinery and Heungkuk Metaltech.
Diversification Opportunities for Seoam Machinery and Heungkuk Metaltech
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seoam and Heungkuk is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Seoam Machinery Industry and Heungkuk Metaltech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heungkuk Metaltech CoLtd and Seoam Machinery 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 Seoam Machinery Industry are associated (or correlated) with Heungkuk Metaltech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heungkuk Metaltech CoLtd has no effect on the direction of Seoam Machinery i.e., Seoam Machinery and Heungkuk Metaltech go up and down completely randomly.
Pair Corralation between Seoam Machinery and Heungkuk Metaltech
Assuming the 90 days trading horizon Seoam Machinery Industry is expected to generate 0.93 times more return on investment than Heungkuk Metaltech. However, Seoam Machinery Industry is 1.08 times less risky than Heungkuk Metaltech. It trades about -0.09 of its potential returns per unit of risk. Heungkuk Metaltech CoLtd is currently generating about -0.16 per unit of risk. If you would invest 377,500 in Seoam Machinery Industry on November 3, 2024 and sell it today you would lose (8,000) from holding Seoam Machinery Industry or give up 2.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoam Machinery Industry vs. Heungkuk Metaltech CoLtd
Performance |
| Timeline |
| Seoam Machinery Industry |
| Heungkuk Metaltech CoLtd |
Seoam Machinery and Heungkuk Metaltech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoam Machinery and Heungkuk Metaltech
The main advantage of trading using opposite Seoam Machinery and Heungkuk Metaltech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoam Machinery position performs unexpectedly, Heungkuk Metaltech 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 Heungkuk Metaltech will offset losses from the drop in Heungkuk Metaltech's long position.| Seoam Machinery vs. Lotte Non Life Insurance | Seoam Machinery vs. E Investment Development | Seoam Machinery vs. Daelim Trading Co | Seoam Machinery vs. Kakao Games Corp |
| Heungkuk Metaltech vs. Hanwha Life Insurance | Heungkuk Metaltech vs. Dongbang Transport Logistics | Heungkuk Metaltech vs. Haitai Confectionery Foods | Heungkuk Metaltech vs. CJ Seafood Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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