Correlation Between Green Cross and Seoul Food
Can any of the company-specific risk be diversified away by investing in both Green Cross 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 Green Cross and Seoul Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Cross Medical and Seoul Food Industrial, you can compare the effects of market volatilities on Green Cross 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 Green Cross with a short position of Seoul Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Cross and Seoul Food.
Diversification Opportunities for Green Cross and Seoul Food
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Green and Seoul is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Green Cross Medical 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 Green Cross 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 Green Cross Medical 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 Green Cross i.e., Green Cross and Seoul Food go up and down completely randomly.
Pair Corralation between Green Cross and Seoul Food
Assuming the 90 days trading horizon Green Cross Medical is expected to under-perform the Seoul Food. In addition to that, Green Cross is 1.2 times more volatile than Seoul Food Industrial. It trades about -0.24 of its total potential returns per unit of risk. Seoul Food Industrial is currently generating about -0.12 per unit of volatility. If you would invest 15,600 in Seoul Food Industrial on September 2, 2024 and sell it today you would lose (700.00) from holding Seoul Food Industrial or give up 4.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Cross Medical vs. Seoul Food Industrial
Performance |
| Timeline |
| Green Cross Medical |
| Seoul Food Industrial |
Green Cross and Seoul Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Cross and Seoul Food
The main advantage of trading using opposite Green Cross and Seoul Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Cross 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.| Green Cross vs. AptaBio Therapeutics | Green Cross vs. KT Hitel | Green Cross vs. SillaJen | Green Cross vs. Cytogen |
| Seoul Food vs. AptaBio Therapeutics | Seoul Food vs. Daewoo SBI SPAC | Seoul Food vs. Dream Security co | Seoul Food vs. Microfriend |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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