Correlation Between Seoam Machinery and UJU Electronics
Can any of the company-specific risk be diversified away by investing in both Seoam Machinery and UJU Electronics 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 UJU Electronics 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 UJU Electronics Co, you can compare the effects of market volatilities on Seoam Machinery and UJU Electronics 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 UJU Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoam Machinery and UJU Electronics.
Diversification Opportunities for Seoam Machinery and UJU Electronics
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Seoam and UJU is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Seoam Machinery Industry and UJU Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UJU Electronics 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 UJU Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UJU Electronics has no effect on the direction of Seoam Machinery i.e., Seoam Machinery and UJU Electronics go up and down completely randomly.
Pair Corralation between Seoam Machinery and UJU Electronics
Assuming the 90 days trading horizon Seoam Machinery Industry is expected to under-perform the UJU Electronics. In addition to that, Seoam Machinery is 1.18 times more volatile than UJU Electronics Co. It trades about -0.07 of its total potential returns per unit of risk. UJU Electronics Co is currently generating about 0.09 per unit of volatility. If you would invest 1,249,000 in UJU Electronics Co on September 19, 2024 and sell it today you would earn a total of 66,000 from holding UJU Electronics Co or generate 5.28% 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. UJU Electronics Co
Performance |
| Timeline |
| Seoam Machinery Industry |
| UJU Electronics |
Seoam Machinery and UJU Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoam Machinery and UJU Electronics
The main advantage of trading using opposite Seoam Machinery and UJU Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoam Machinery position performs unexpectedly, UJU Electronics 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 UJU Electronics will offset losses from the drop in UJU Electronics' long position.| Seoam Machinery vs. Rainbow Robotics | Seoam Machinery vs. COWINTECH Co | Seoam Machinery vs. CS BEARING CoLtd | Seoam Machinery vs. Young Poong Precision |
| UJU Electronics vs. Tuksu Engineering ConstructionLtd | UJU Electronics vs. Hanshin Construction Co | UJU Electronics vs. Seoam Machinery Industry | UJU Electronics vs. TS Investment 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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