Correlation Between Sewoon Medical and SEOJEON ELECTRIC
Can any of the company-specific risk be diversified away by investing in both Sewoon Medical and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC 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 SEOJEON ELECTRIC MACHINERY, you can compare the effects of market volatilities on Sewoon Medical and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sewoon Medical and SEOJEON ELECTRIC.
Diversification Opportunities for Sewoon Medical and SEOJEON ELECTRIC
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sewoon and SEOJEON is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sewoon Medical Co and SEOJEON ELECTRIC MACHINERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEOJEON ELECTRIC MAC 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 SEOJEON ELECTRIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEOJEON ELECTRIC MAC has no effect on the direction of Sewoon Medical i.e., Sewoon Medical and SEOJEON ELECTRIC go up and down completely randomly.
Pair Corralation between Sewoon Medical and SEOJEON ELECTRIC
Assuming the 90 days trading horizon Sewoon Medical Co is expected to generate 0.57 times more return on investment than SEOJEON ELECTRIC. However, Sewoon Medical Co is 1.75 times less risky than SEOJEON ELECTRIC. It trades about -0.01 of its potential returns per unit of risk. SEOJEON ELECTRIC MACHINERY is currently generating about -0.17 per unit of risk. If you would invest 252,500 in Sewoon Medical Co on September 14, 2024 and sell it today you would lose (2,500) from holding Sewoon Medical Co or give up 0.99% 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. SEOJEON ELECTRIC MACHINERY
Performance |
| Timeline |
| Sewoon Medical |
| SEOJEON ELECTRIC MAC |
Sewoon Medical and SEOJEON ELECTRIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sewoon Medical and SEOJEON ELECTRIC
The main advantage of trading using opposite Sewoon Medical and SEOJEON ELECTRIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sewoon Medical position performs unexpectedly, SEOJEON ELECTRIC 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 SEOJEON ELECTRIC will offset losses from the drop in SEOJEON ELECTRIC'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 |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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