Correlation Between Sewoon Medical and Sejong Telecom
Can any of the company-specific risk be diversified away by investing in both Sewoon Medical and Sejong Telecom 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 Sejong Telecom 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 Sejong Telecom, you can compare the effects of market volatilities on Sewoon Medical and Sejong Telecom 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 Sejong Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sewoon Medical and Sejong Telecom.
Diversification Opportunities for Sewoon Medical and Sejong Telecom
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sewoon and Sejong is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Sewoon Medical Co and Sejong Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sejong Telecom 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 Sejong Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sejong Telecom has no effect on the direction of Sewoon Medical i.e., Sewoon Medical and Sejong Telecom go up and down completely randomly.
Pair Corralation between Sewoon Medical and Sejong Telecom
Assuming the 90 days trading horizon Sewoon Medical Co is expected to generate 0.47 times more return on investment than Sejong Telecom. However, Sewoon Medical Co is 2.15 times less risky than Sejong Telecom. It trades about -0.02 of its potential returns per unit of risk. Sejong Telecom is currently generating about -0.02 per unit of risk. If you would invest 305,455 in Sewoon Medical Co on September 1, 2024 and sell it today you would lose (51,455) from holding Sewoon Medical Co or give up 16.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.13% |
| Values | Daily Returns |
Sewoon Medical Co vs. Sejong Telecom
Performance |
| Timeline |
| Sewoon Medical |
| Sejong Telecom |
Sewoon Medical and Sejong Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sewoon Medical and Sejong Telecom
The main advantage of trading using opposite Sewoon Medical and Sejong Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sewoon Medical position performs unexpectedly, Sejong Telecom 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 Sejong Telecom will offset losses from the drop in Sejong Telecom's long position.| Sewoon Medical vs. Infinitt Healthcare Co | Sewoon Medical vs. PLAYWITH | Sewoon Medical vs. CKH Food Health | Sewoon Medical vs. Samhwa Paint Industrial |
| Sejong Telecom vs. AfreecaTV Co | Sejong Telecom vs. Seegene | Sejong Telecom vs. SS TECH | Sejong Telecom vs. Busan Industrial 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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