Correlation Between Seoam Machinery and COWINTECH
Can any of the company-specific risk be diversified away by investing in both Seoam Machinery and COWINTECH 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 COWINTECH 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 COWINTECH Co, you can compare the effects of market volatilities on Seoam Machinery and COWINTECH 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 COWINTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoam Machinery and COWINTECH.
Diversification Opportunities for Seoam Machinery and COWINTECH
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Seoam and COWINTECH is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Seoam Machinery Industry and COWINTECH Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COWINTECH 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 COWINTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COWINTECH has no effect on the direction of Seoam Machinery i.e., Seoam Machinery and COWINTECH go up and down completely randomly.
Pair Corralation between Seoam Machinery and COWINTECH
Assuming the 90 days trading horizon Seoam Machinery Industry is expected to generate 0.85 times more return on investment than COWINTECH. However, Seoam Machinery Industry is 1.18 times less risky than COWINTECH. It trades about -0.02 of its potential returns per unit of risk. COWINTECH Co is currently generating about -0.08 per unit of risk. If you would invest 451,500 in Seoam Machinery Industry on September 3, 2024 and sell it today you would lose (67,000) from holding Seoam Machinery Industry or give up 14.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoam Machinery Industry vs. COWINTECH Co
Performance |
| Timeline |
| Seoam Machinery Industry |
| COWINTECH |
Seoam Machinery and COWINTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoam Machinery and COWINTECH
The main advantage of trading using opposite Seoam Machinery and COWINTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoam Machinery position performs unexpectedly, COWINTECH 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 COWINTECH will offset losses from the drop in COWINTECH'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 |
| COWINTECH vs. Korea Refract | COWINTECH vs. Korea Refractories Co | COWINTECH vs. Shinhan Inverse WTI | COWINTECH vs. SAMYOUNG M Tek 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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