Correlation Between Seojin Automotive and FarmStory
Can any of the company-specific risk be diversified away by investing in both Seojin Automotive and FarmStory 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 Seojin Automotive and FarmStory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seojin Automotive CoLtd and FarmStory Co, you can compare the effects of market volatilities on Seojin Automotive and FarmStory 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 Seojin Automotive with a short position of FarmStory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seojin Automotive and FarmStory.
Diversification Opportunities for Seojin Automotive and FarmStory
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Seojin and FarmStory is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Seojin Automotive CoLtd and FarmStory Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FarmStory and Seojin Automotive 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 Seojin Automotive CoLtd are associated (or correlated) with FarmStory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FarmStory has no effect on the direction of Seojin Automotive i.e., Seojin Automotive and FarmStory go up and down completely randomly.
Pair Corralation between Seojin Automotive and FarmStory
Assuming the 90 days trading horizon Seojin Automotive CoLtd is expected to generate 1.23 times more return on investment than FarmStory. However, Seojin Automotive is 1.23 times more volatile than FarmStory Co. It trades about -0.01 of its potential returns per unit of risk. FarmStory Co is currently generating about -0.03 per unit of risk. If you would invest 299,000 in Seojin Automotive CoLtd on August 29, 2024 and sell it today you would lose (99,600) from holding Seojin Automotive CoLtd or give up 33.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seojin Automotive CoLtd vs. FarmStory Co
Performance |
| Timeline |
| Seojin Automotive CoLtd |
| FarmStory |
Seojin Automotive and FarmStory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seojin Automotive and FarmStory
The main advantage of trading using opposite Seojin Automotive and FarmStory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seojin Automotive position performs unexpectedly, FarmStory 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 FarmStory will offset losses from the drop in FarmStory's long position.| Seojin Automotive vs. KMH Hitech Co | Seojin Automotive vs. GemVaxKAEL CoLtd | Seojin Automotive vs. Busan Industrial Co | Seojin Automotive vs. Busan Ind |
| FarmStory vs. Samsung Electronics Co | FarmStory vs. Samsung Electronics Co | FarmStory vs. Hyundai Motor Co | FarmStory vs. Hyundai Motor |
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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