Correlation Between PI Advanced and Seojin Automotive
Can any of the company-specific risk be diversified away by investing in both PI Advanced and Seojin Automotive 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 PI Advanced and Seojin Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PI Advanced Materials and Seojin Automotive CoLtd, you can compare the effects of market volatilities on PI Advanced and Seojin Automotive 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 PI Advanced with a short position of Seojin Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of PI Advanced and Seojin Automotive.
Diversification Opportunities for PI Advanced and Seojin Automotive
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 178920 and Seojin is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding PI Advanced Materials and Seojin Automotive CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seojin Automotive CoLtd and PI Advanced 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 PI Advanced Materials are associated (or correlated) with Seojin Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seojin Automotive CoLtd has no effect on the direction of PI Advanced i.e., PI Advanced and Seojin Automotive go up and down completely randomly.
Pair Corralation between PI Advanced and Seojin Automotive
Assuming the 90 days trading horizon PI Advanced Materials is expected to under-perform the Seojin Automotive. In addition to that, PI Advanced is 1.07 times more volatile than Seojin Automotive CoLtd. It trades about -0.02 of its total potential returns per unit of risk. Seojin Automotive CoLtd is currently generating about -0.01 per unit of volatility. If you would invest 299,500 in Seojin Automotive CoLtd on September 1, 2024 and sell it today you would lose (101,400) from holding Seojin Automotive CoLtd or give up 33.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PI Advanced Materials vs. Seojin Automotive CoLtd
Performance |
| Timeline |
| PI Advanced Materials |
| Seojin Automotive CoLtd |
PI Advanced and Seojin Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PI Advanced and Seojin Automotive
The main advantage of trading using opposite PI Advanced and Seojin Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PI Advanced position performs unexpectedly, Seojin Automotive 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 Seojin Automotive will offset losses from the drop in Seojin Automotive's long position.| PI Advanced vs. Samsung Electronics Co | PI Advanced vs. Samsung Electronics Co | PI Advanced vs. LG Energy Solution | PI Advanced vs. SK Hynix |
| Seojin Automotive vs. Polaris Office Corp | Seojin Automotive vs. TOPMATERIAL LTD | Seojin Automotive vs. PI Advanced Materials | Seojin Automotive vs. Tway Air 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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