Correlation Between Sewoon Medical and Korea Steel
Can any of the company-specific risk be diversified away by investing in both Sewoon Medical and Korea Steel 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 Sewoon Medical and Korea Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sewoon Medical Co and Korea Steel Co, you can compare the effects of market volatilities on Sewoon Medical and Korea Steel 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 Sewoon Medical with a short position of Korea Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sewoon Medical and Korea Steel.
Diversification Opportunities for Sewoon Medical and Korea Steel
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sewoon and Korea is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sewoon Medical Co and Korea Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Steel and Sewoon Medical 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 Sewoon Medical Co are associated (or correlated) with Korea Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Steel has no effect on the direction of Sewoon Medical i.e., Sewoon Medical and Korea Steel go up and down completely randomly.
Pair Corralation between Sewoon Medical and Korea Steel
Assuming the 90 days trading horizon Sewoon Medical Co is expected to under-perform the Korea Steel. In addition to that, Sewoon Medical is 1.24 times more volatile than Korea Steel Co. It trades about -0.28 of its total potential returns per unit of risk. Korea Steel Co is currently generating about -0.19 per unit of volatility. If you would invest 168,900 in Korea Steel Co on November 5, 2024 and sell it today you would lose (4,400) from holding Korea Steel Co or give up 2.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sewoon Medical Co vs. Korea Steel Co
Performance |
| Timeline |
| Sewoon Medical |
| Korea Steel |
Sewoon Medical and Korea Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sewoon Medical and Korea Steel
The main advantage of trading using opposite Sewoon Medical and Korea Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sewoon Medical position performs unexpectedly, Korea Steel 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 Korea Steel will offset losses from the drop in Korea Steel's long position.| Sewoon Medical vs. Samsung Electronics Co | Sewoon Medical vs. Samsung Electronics Co | Sewoon Medical vs. KB Financial Group | Sewoon Medical vs. Shinhan Financial Group |
| Korea Steel vs. Kaonmedia Co | Korea Steel vs. Pyung Hwa Industrial | Korea Steel vs. Eagon Industrial Co | Korea Steel vs. JYP Entertainment 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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