Correlation Between Alton Sports and Seoul Food
Can any of the company-specific risk be diversified away by investing in both Alton Sports and Seoul Food 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 Alton Sports and Seoul Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alton Sports CoLtd and Seoul Food Industrial, you can compare the effects of market volatilities on Alton Sports and Seoul Food 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 Alton Sports with a short position of Seoul Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alton Sports and Seoul Food.
Diversification Opportunities for Alton Sports and Seoul Food
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alton and Seoul is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Alton Sports CoLtd and Seoul Food Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Food Industrial and Alton Sports 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 Alton Sports CoLtd are associated (or correlated) with Seoul Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Food Industrial has no effect on the direction of Alton Sports i.e., Alton Sports and Seoul Food go up and down completely randomly.
Pair Corralation between Alton Sports and Seoul Food
Assuming the 90 days trading horizon Alton Sports CoLtd is expected to generate 1.36 times more return on investment than Seoul Food. However, Alton Sports is 1.36 times more volatile than Seoul Food Industrial. It trades about 0.27 of its potential returns per unit of risk. Seoul Food Industrial is currently generating about -0.11 per unit of risk. If you would invest 144,000 in Alton Sports CoLtd on November 1, 2024 and sell it today you would earn a total of 6,100 from holding Alton Sports CoLtd or generate 4.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alton Sports CoLtd vs. Seoul Food Industrial
Performance |
| Timeline |
| Alton Sports CoLtd |
| Seoul Food Industrial |
Alton Sports and Seoul Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alton Sports and Seoul Food
The main advantage of trading using opposite Alton Sports and Seoul Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alton Sports position performs unexpectedly, Seoul Food 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 Seoul Food will offset losses from the drop in Seoul Food's long position.| Alton Sports vs. Neungyule Education | Alton Sports vs. Songwon Industrial Co | Alton Sports vs. Korea Industrial Co | Alton Sports vs. YeaRimDang Publishing Co |
| Seoul Food vs. Hanjin Transportation Co | Seoul Food vs. Daechang Steel Co | Seoul Food vs. Insun Environment New | Seoul Food vs. Alton Sports CoLtd |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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