Correlation Between Seojin Automotive and Barunson Entertainment
Can any of the company-specific risk be diversified away by investing in both Seojin Automotive and Barunson Entertainment 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 Barunson Entertainment 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 Barunson Entertainment Arts, you can compare the effects of market volatilities on Seojin Automotive and Barunson Entertainment 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 Barunson Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seojin Automotive and Barunson Entertainment.
Diversification Opportunities for Seojin Automotive and Barunson Entertainment
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seojin and Barunson is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Seojin Automotive CoLtd and Barunson Entertainment Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barunson Entertainment 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 Barunson Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barunson Entertainment has no effect on the direction of Seojin Automotive i.e., Seojin Automotive and Barunson Entertainment go up and down completely randomly.
Pair Corralation between Seojin Automotive and Barunson Entertainment
Assuming the 90 days trading horizon Seojin Automotive CoLtd is expected to under-perform the Barunson Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Seojin Automotive CoLtd is 1.37 times less risky than Barunson Entertainment. The stock trades about -0.13 of its potential returns per unit of risk. The Barunson Entertainment Arts is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 52,000 in Barunson Entertainment Arts on November 2, 2024 and sell it today you would lose (8,100) from holding Barunson Entertainment Arts or give up 15.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seojin Automotive CoLtd vs. Barunson Entertainment Arts
Performance |
| Timeline |
| Seojin Automotive CoLtd |
| Barunson Entertainment |
Seojin Automotive and Barunson Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seojin Automotive and Barunson Entertainment
The main advantage of trading using opposite Seojin Automotive and Barunson Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seojin Automotive position performs unexpectedly, Barunson Entertainment 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 Barunson Entertainment will offset losses from the drop in Barunson Entertainment's long position.| Seojin Automotive vs. Samsung Electronics Co | Seojin Automotive vs. Samsung Electronics Co | Seojin Automotive vs. KB Financial Group | Seojin Automotive vs. Shinhan Financial Group |
| Barunson Entertainment vs. Hanjoo Light Metal | Barunson Entertainment vs. Hannong Chemicals | Barunson Entertainment vs. iNtRON Biotechnology | Barunson Entertainment vs. Daiyang Metal 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 Stocks Directory module to find actively traded stocks across global markets.
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