Correlation Between Sewoon Medical and Korea Computer
Can any of the company-specific risk be diversified away by investing in both Sewoon Medical and Korea Computer 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 Computer 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 Computer Systems, you can compare the effects of market volatilities on Sewoon Medical and Korea Computer 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 Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sewoon Medical and Korea Computer.
Diversification Opportunities for Sewoon Medical and Korea Computer
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sewoon and Korea is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Sewoon Medical Co and Korea Computer Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Computer Systems 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 Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Computer Systems has no effect on the direction of Sewoon Medical i.e., Sewoon Medical and Korea Computer go up and down completely randomly.
Pair Corralation between Sewoon Medical and Korea Computer
Assuming the 90 days trading horizon Sewoon Medical Co is expected to generate 0.21 times more return on investment than Korea Computer. However, Sewoon Medical Co is 4.81 times less risky than Korea Computer. It trades about -0.08 of its potential returns per unit of risk. Korea Computer Systems is currently generating about -0.2 per unit of risk. If you would invest 249,000 in Sewoon Medical Co on November 4, 2024 and sell it today you would lose (5,000) from holding Sewoon Medical Co or give up 2.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sewoon Medical Co vs. Korea Computer Systems
Performance |
| Timeline |
| Sewoon Medical |
| Korea Computer Systems |
Sewoon Medical and Korea Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sewoon Medical and Korea Computer
The main advantage of trading using opposite Sewoon Medical and Korea Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sewoon Medical position performs unexpectedly, Korea Computer 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 Computer will offset losses from the drop in Korea Computer'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 Computer vs. Settlebank | Korea Computer vs. Cafe24 Corp | Korea Computer vs. Daishin Information Communications | Korea Computer vs. SSR Inc |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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