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
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alton and Seoul is 0.83. 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 under-perform the Seoul Food. But the stock apears to be less risky and, when comparing its historical volatility, Alton Sports CoLtd is 1.01 times less risky than Seoul Food. The stock trades about -0.36 of its potential returns per unit of risk. The Seoul Food Industrial is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 15,000 in Seoul Food Industrial on September 12, 2024 and sell it today you would lose (300.00) from holding Seoul Food Industrial or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| 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. Daou Data Corp | Alton Sports vs. Solution Advanced Technology | Alton Sports vs. Busan Industrial Co | Alton Sports vs. Busan Ind |
| Seoul Food vs. Playgram Co | Seoul Food vs. ChipsMedia | Seoul Food vs. Alton Sports CoLtd | Seoul Food vs. Seoul Broadcasting System |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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