Correlation Between Seoam Machinery and Sungdo Engineering
Can any of the company-specific risk be diversified away by investing in both Seoam Machinery and Sungdo Engineering 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 Sungdo Engineering 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 Sungdo Engineering Construction, you can compare the effects of market volatilities on Seoam Machinery and Sungdo Engineering 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 Sungdo Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoam Machinery and Sungdo Engineering.
Diversification Opportunities for Seoam Machinery and Sungdo Engineering
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Seoam and Sungdo is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Seoam Machinery Industry and Sungdo Engineering Constructio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungdo Engineering 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 Sungdo Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungdo Engineering has no effect on the direction of Seoam Machinery i.e., Seoam Machinery and Sungdo Engineering go up and down completely randomly.
Pair Corralation between Seoam Machinery and Sungdo Engineering
Assuming the 90 days trading horizon Seoam Machinery Industry is expected to under-perform the Sungdo Engineering. But the stock apears to be less risky and, when comparing its historical volatility, Seoam Machinery Industry is 1.1 times less risky than Sungdo Engineering. The stock trades about -0.02 of its potential returns per unit of risk. The Sungdo Engineering Construction is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 420,000 in Sungdo Engineering Construction on September 3, 2024 and sell it today you would earn a total of 10,000 from holding Sungdo Engineering Construction or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoam Machinery Industry vs. Sungdo Engineering Constructio
Performance |
| Timeline |
| Seoam Machinery Industry |
| Sungdo Engineering |
Seoam Machinery and Sungdo Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoam Machinery and Sungdo Engineering
The main advantage of trading using opposite Seoam Machinery and Sungdo Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoam Machinery position performs unexpectedly, Sungdo Engineering 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 Sungdo Engineering will offset losses from the drop in Sungdo Engineering's long position.| Seoam Machinery vs. KyungIn Electronics Co | Seoam Machinery vs. Dongbang Transport Logistics | Seoam Machinery vs. Hanjin Transportation Co | Seoam Machinery vs. Shinil Electronics Co |
| Sungdo Engineering vs. LG Display | Sungdo Engineering vs. Hyundai Motor | Sungdo Engineering vs. Hyundai Motor Co | Sungdo Engineering vs. Hyundai Motor 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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |