Correlation Between Seoam Machinery and TJ Media
Can any of the company-specific risk be diversified away by investing in both Seoam Machinery and TJ 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 Seoam Machinery and TJ Media 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 TJ media Co, you can compare the effects of market volatilities on Seoam Machinery and TJ 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 Seoam Machinery with a short position of TJ Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoam Machinery and TJ Media.
Diversification Opportunities for Seoam Machinery and TJ Media
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Seoam and 032540 is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Seoam Machinery Industry and TJ media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TJ media 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 TJ Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TJ media has no effect on the direction of Seoam Machinery i.e., Seoam Machinery and TJ Media go up and down completely randomly.
Pair Corralation between Seoam Machinery and TJ Media
Assuming the 90 days trading horizon Seoam Machinery is expected to generate 5.68 times less return on investment than TJ Media. In addition to that, Seoam Machinery is 2.05 times more volatile than TJ media Co. It trades about 0.02 of its total potential returns per unit of risk. TJ media Co is currently generating about 0.2 per unit of volatility. If you would invest 439,489 in TJ media Co on October 30, 2024 and sell it today you would earn a total of 49,511 from holding TJ media Co or generate 11.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoam Machinery Industry vs. TJ media Co
Performance |
| Timeline |
| Seoam Machinery Industry |
| TJ media |
Seoam Machinery and TJ Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoam Machinery and TJ Media
The main advantage of trading using opposite Seoam Machinery and TJ Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoam Machinery position performs unexpectedly, TJ 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 TJ Media will offset losses from the drop in TJ Media's long position.| Seoam Machinery vs. Samsung Publishing Co | Seoam Machinery vs. Dongnam Chemical Co | Seoam Machinery vs. KPX Green Chemical | Seoam Machinery vs. Cuckoo Homesys Co |
| TJ Media vs. Ssangyong Information Communication | TJ Media vs. Incar Financial Service | TJ Media vs. DB Insurance Co | TJ Media vs. KB Financial Group |
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.
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