Correlation Between Sewoon Medical and Kyung Chang
Can any of the company-specific risk be diversified away by investing in both Sewoon Medical and Kyung Chang 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 Kyung Chang 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 Kyung Chang Industrial, you can compare the effects of market volatilities on Sewoon Medical and Kyung Chang 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 Kyung Chang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sewoon Medical and Kyung Chang.
Diversification Opportunities for Sewoon Medical and Kyung Chang
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sewoon and Kyung is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Sewoon Medical Co and Kyung Chang Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyung Chang Industrial 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 Kyung Chang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyung Chang Industrial has no effect on the direction of Sewoon Medical i.e., Sewoon Medical and Kyung Chang go up and down completely randomly.
Pair Corralation between Sewoon Medical and Kyung Chang
Assuming the 90 days trading horizon Sewoon Medical Co is expected to under-perform the Kyung Chang. But the stock apears to be less risky and, when comparing its historical volatility, Sewoon Medical Co is 1.97 times less risky than Kyung Chang. The stock trades about -0.02 of its potential returns per unit of risk. The Kyung Chang Industrial is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 229,500 in Kyung Chang Industrial on September 14, 2024 and sell it today you would lose (23,000) from holding Kyung Chang Industrial or give up 10.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.59% |
| Values | Daily Returns |
Sewoon Medical Co vs. Kyung Chang Industrial
Performance |
| Timeline |
| Sewoon Medical |
| Kyung Chang Industrial |
Sewoon Medical and Kyung Chang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sewoon Medical and Kyung Chang
The main advantage of trading using opposite Sewoon Medical and Kyung Chang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sewoon Medical position performs unexpectedly, Kyung Chang 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 Kyung Chang will offset losses from the drop in Kyung Chang's long position.| Sewoon Medical vs. Samsung Electronics Co | Sewoon Medical vs. Samsung Electronics Co | Sewoon Medical vs. SK Hynix | Sewoon Medical vs. SK Holdings Co |
| Kyung Chang vs. Daou Data Corp | Kyung Chang vs. Solution Advanced Technology | Kyung Chang vs. Busan Industrial Co | Kyung Chang vs. Busan Ind |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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