Correlation Between Sewoon Medical and TOPMATERIAL
Can any of the company-specific risk be diversified away by investing in both Sewoon Medical and TOPMATERIAL 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 TOPMATERIAL 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 TOPMATERIAL LTD, you can compare the effects of market volatilities on Sewoon Medical and TOPMATERIAL 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 TOPMATERIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sewoon Medical and TOPMATERIAL.
Diversification Opportunities for Sewoon Medical and TOPMATERIAL
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sewoon and TOPMATERIAL is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Sewoon Medical Co and TOPMATERIAL LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOPMATERIAL LTD 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 TOPMATERIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOPMATERIAL LTD has no effect on the direction of Sewoon Medical i.e., Sewoon Medical and TOPMATERIAL go up and down completely randomly.
Pair Corralation between Sewoon Medical and TOPMATERIAL
Assuming the 90 days trading horizon Sewoon Medical is expected to generate 1.27 times less return on investment than TOPMATERIAL. But when comparing it to its historical volatility, Sewoon Medical Co is 2.51 times less risky than TOPMATERIAL. It trades about 0.15 of its potential returns per unit of risk. TOPMATERIAL LTD is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,705,000 in TOPMATERIAL LTD on October 25, 2024 and sell it today you would earn a total of 100,000 from holding TOPMATERIAL LTD or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sewoon Medical Co vs. TOPMATERIAL LTD
Performance |
| Timeline |
| Sewoon Medical |
| TOPMATERIAL LTD |
Sewoon Medical and TOPMATERIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sewoon Medical and TOPMATERIAL
The main advantage of trading using opposite Sewoon Medical and TOPMATERIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sewoon Medical position performs unexpectedly, TOPMATERIAL 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 TOPMATERIAL will offset losses from the drop in TOPMATERIAL's long position.| Sewoon Medical vs. Youngsin Metal Industrial | Sewoon Medical vs. PJ Metal Co | Sewoon Medical vs. Choil Aluminum | Sewoon Medical vs. Korea Information Engineering |
| TOPMATERIAL vs. Nice Information Telecommunication | TOPMATERIAL vs. Iljin Display | TOPMATERIAL vs. Daishin Information Communications | TOPMATERIAL vs. Sewoon Medical 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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