Correlation Between Sewoon Medical and Dongyang
Can any of the company-specific risk be diversified away by investing in both Sewoon Medical and Dongyang 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 Dongyang 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 Dongyang EP, you can compare the effects of market volatilities on Sewoon Medical and Dongyang 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 Dongyang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sewoon Medical and Dongyang.
Diversification Opportunities for Sewoon Medical and Dongyang
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sewoon and Dongyang is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sewoon Medical Co and Dongyang EP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongyang EP 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 Dongyang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongyang EP has no effect on the direction of Sewoon Medical i.e., Sewoon Medical and Dongyang go up and down completely randomly.
Pair Corralation between Sewoon Medical and Dongyang
Assuming the 90 days trading horizon Sewoon Medical Co is expected to generate 1.44 times more return on investment than Dongyang. However, Sewoon Medical is 1.44 times more volatile than Dongyang EP. It trades about 0.15 of its potential returns per unit of risk. Dongyang EP is currently generating about 0.11 per unit of risk. If you would invest 237,627 in Sewoon Medical Co on October 24, 2024 and sell it today you would earn a total of 8,373 from holding Sewoon Medical Co or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sewoon Medical Co vs. Dongyang EP
Performance |
| Timeline |
| Sewoon Medical |
| Dongyang EP |
Sewoon Medical and Dongyang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sewoon Medical and Dongyang
The main advantage of trading using opposite Sewoon Medical and Dongyang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sewoon Medical position performs unexpectedly, Dongyang 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 Dongyang will offset losses from the drop in Dongyang's long position.| Sewoon Medical vs. Genie Music | Sewoon Medical vs. Samsung Publishing Co | Sewoon Medical vs. PJ Metal Co | Sewoon Medical vs. Hyunwoo Industrial Co |
| Dongyang vs. Humasis Co | Dongyang vs. Access Bio | Dongyang vs. Taewoong Logistics CoLtd | Dongyang vs. Hana Financial 7 |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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