Correlation Between Seoam Machinery and Hanwha Life
Can any of the company-specific risk be diversified away by investing in both Seoam Machinery and Hanwha Life 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 Hanwha Life 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 Hanwha Life Insurance, you can compare the effects of market volatilities on Seoam Machinery and Hanwha Life 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 Hanwha Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoam Machinery and Hanwha Life.
Diversification Opportunities for Seoam Machinery and Hanwha Life
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Seoam and Hanwha is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Seoam Machinery Industry and Hanwha Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha Life Insurance 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 Hanwha Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha Life Insurance has no effect on the direction of Seoam Machinery i.e., Seoam Machinery and Hanwha Life go up and down completely randomly.
Pair Corralation between Seoam Machinery and Hanwha Life
Assuming the 90 days trading horizon Seoam Machinery Industry is expected to generate 0.96 times more return on investment than Hanwha Life. However, Seoam Machinery Industry is 1.04 times less risky than Hanwha Life. It trades about 0.25 of its potential returns per unit of risk. Hanwha Life Insurance is currently generating about -0.09 per unit of risk. If you would invest 351,015 in Seoam Machinery Industry on October 12, 2024 and sell it today you would earn a total of 28,485 from holding Seoam Machinery Industry or generate 8.12% 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. Hanwha Life Insurance
Performance |
| Timeline |
| Seoam Machinery Industry |
| Hanwha Life Insurance |
Seoam Machinery and Hanwha Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoam Machinery and Hanwha Life
The main advantage of trading using opposite Seoam Machinery and Hanwha Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoam Machinery position performs unexpectedly, Hanwha Life 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 Hanwha Life will offset losses from the drop in Hanwha Life's long position.| Seoam Machinery vs. Homecast CoLtd | Seoam Machinery vs. CJ Seafood Corp | Seoam Machinery vs. KT Submarine Telecom | Seoam Machinery vs. Samlip General Foods |
| Hanwha Life vs. Sungdo Engineering Construction | Hanwha Life vs. Seoam Machinery Industry | Hanwha Life vs. Genie Music | Hanwha Life vs. Dongwoo Farm To |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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