Correlation Between Sewoon Medical and Seah Steel
Can any of the company-specific risk be diversified away by investing in both Sewoon Medical and Seah Steel 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 Seah Steel 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 Seah Steel Corp, you can compare the effects of market volatilities on Sewoon Medical and Seah Steel 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 Seah Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sewoon Medical and Seah Steel.
Diversification Opportunities for Sewoon Medical and Seah Steel
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sewoon and Seah is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sewoon Medical Co and Seah Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seah Steel Corp 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 Seah Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seah Steel Corp has no effect on the direction of Sewoon Medical i.e., Sewoon Medical and Seah Steel go up and down completely randomly.
Pair Corralation between Sewoon Medical and Seah Steel
Assuming the 90 days trading horizon Sewoon Medical Co is expected to under-perform the Seah Steel. But the stock apears to be less risky and, when comparing its historical volatility, Sewoon Medical Co is 2.94 times less risky than Seah Steel. The stock trades about -0.12 of its potential returns per unit of risk. The Seah Steel Corp is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 12,230,000 in Seah Steel Corp on November 8, 2024 and sell it today you would earn a total of 2,470,000 from holding Seah Steel Corp or generate 20.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sewoon Medical Co vs. Seah Steel Corp
Performance |
| Timeline |
| Sewoon Medical |
| Seah Steel Corp |
Sewoon Medical and Seah Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sewoon Medical and Seah Steel
The main advantage of trading using opposite Sewoon Medical and Seah Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sewoon Medical position performs unexpectedly, Seah Steel 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 Seah Steel will offset losses from the drop in Seah Steel's long position.| Sewoon Medical vs. Lotte Fine Chemical | Sewoon Medical vs. Sung Bo Chemicals | Sewoon Medical vs. Haitai Confectionery Foods | Sewoon Medical vs. Kukdo Chemical Co |
| Seah Steel vs. Dong Il Steel | Seah Steel vs. Ajusteel Co | Seah Steel vs. Ni Steel | Seah Steel vs. Korea Steel 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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