Correlation Between Microfriend and SeAH Besteel
Can any of the company-specific risk be diversified away by investing in both Microfriend and SeAH Besteel 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 Microfriend and SeAH Besteel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microfriend and SeAH Besteel Corp, you can compare the effects of market volatilities on Microfriend and SeAH Besteel 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 Microfriend with a short position of SeAH Besteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microfriend and SeAH Besteel.
Diversification Opportunities for Microfriend and SeAH Besteel
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Microfriend and SeAH is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Microfriend and SeAH Besteel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SeAH Besteel Corp and Microfriend 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 Microfriend are associated (or correlated) with SeAH Besteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SeAH Besteel Corp has no effect on the direction of Microfriend i.e., Microfriend and SeAH Besteel go up and down completely randomly.
Pair Corralation between Microfriend and SeAH Besteel
Assuming the 90 days trading horizon Microfriend is expected to generate 1.34 times more return on investment than SeAH Besteel. However, Microfriend is 1.34 times more volatile than SeAH Besteel Corp. It trades about -0.1 of its potential returns per unit of risk. SeAH Besteel Corp is currently generating about -0.16 per unit of risk. If you would invest 307,500 in Microfriend on October 30, 2024 and sell it today you would lose (39,500) from holding Microfriend or give up 12.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microfriend vs. SeAH Besteel Corp
Performance |
| Timeline |
| Microfriend |
| SeAH Besteel Corp |
Microfriend and SeAH Besteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microfriend and SeAH Besteel
The main advantage of trading using opposite Microfriend and SeAH Besteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microfriend position performs unexpectedly, SeAH Besteel 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 SeAH Besteel will offset losses from the drop in SeAH Besteel's long position.| Microfriend vs. Spolytech Co | Microfriend vs. Woori Technology | Microfriend vs. PNC Technologies co | Microfriend vs. A Tech Solution Co |
| SeAH Besteel vs. Daou Data Corp | SeAH Besteel vs. SBI Investment KOREA | SeAH Besteel vs. Korea Information Engineering | SeAH Besteel vs. Daol Investment Securities |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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