Correlation Between Microfriend and Seoul Food
Can any of the company-specific risk be diversified away by investing in both Microfriend 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 Microfriend and Seoul Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microfriend and Seoul Food Industrial, you can compare the effects of market volatilities on Microfriend 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 Microfriend with a short position of Seoul Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microfriend and Seoul Food.
Diversification Opportunities for Microfriend and Seoul Food
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Microfriend and Seoul is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Microfriend 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 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 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 Microfriend i.e., Microfriend and Seoul Food go up and down completely randomly.
Pair Corralation between Microfriend and Seoul Food
Assuming the 90 days trading horizon Microfriend is expected to generate 2.69 times more return on investment than Seoul Food. However, Microfriend is 2.69 times more volatile than Seoul Food Industrial. It trades about 0.04 of its potential returns per unit of risk. Seoul Food Industrial is currently generating about 0.0 per unit of risk. If you would invest 284,000 in Microfriend on October 23, 2024 and sell it today you would earn a total of 4,000 from holding Microfriend or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microfriend vs. Seoul Food Industrial
Performance |
| Timeline |
| Microfriend |
| Seoul Food Industrial |
Microfriend and Seoul Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microfriend and Seoul Food
The main advantage of trading using opposite Microfriend and Seoul Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microfriend 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.| Microfriend vs. LG Household Healthcare | Microfriend vs. Polaris Office Corp | Microfriend vs. Hanjoo Light Metal | Microfriend vs. Sempio Foods Co |
| Seoul Food vs. Mobileleader CoLtd | Seoul Food vs. Nice Information Telecommunication | Seoul Food vs. Inzi Display CoLtd | Seoul Food vs. Samsung Publishing 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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