Correlation Between SEOJEON ELECTRIC and SH Energy
Can any of the company-specific risk be diversified away by investing in both SEOJEON ELECTRIC and SH Energy 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 SEOJEON ELECTRIC and SH Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEOJEON ELECTRIC MACHINERY and SH Energy Chemical, you can compare the effects of market volatilities on SEOJEON ELECTRIC and SH Energy 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 SEOJEON ELECTRIC with a short position of SH Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEOJEON ELECTRIC and SH Energy.
Diversification Opportunities for SEOJEON ELECTRIC and SH Energy
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between SEOJEON and 002360 is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding SEOJEON ELECTRIC MACHINERY and SH Energy Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SH Energy Chemical and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC MACHINERY are associated (or correlated) with SH Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SH Energy Chemical has no effect on the direction of SEOJEON ELECTRIC i.e., SEOJEON ELECTRIC and SH Energy go up and down completely randomly.
Pair Corralation between SEOJEON ELECTRIC and SH Energy
Assuming the 90 days trading horizon SEOJEON ELECTRIC MACHINERY is expected to under-perform the SH Energy. But the stock apears to be less risky and, when comparing its historical volatility, SEOJEON ELECTRIC MACHINERY is 1.25 times less risky than SH Energy. The stock trades about -0.17 of its potential returns per unit of risk. The SH Energy Chemical is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 50,900 in SH Energy Chemical on August 28, 2024 and sell it today you would earn a total of 4,600 from holding SH Energy Chemical or generate 9.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEOJEON ELECTRIC MACHINERY vs. SH Energy Chemical
Performance |
| Timeline |
| SEOJEON ELECTRIC MAC |
| SH Energy Chemical |
SEOJEON ELECTRIC and SH Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEOJEON ELECTRIC and SH Energy
The main advantage of trading using opposite SEOJEON ELECTRIC and SH Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEOJEON ELECTRIC position performs unexpectedly, SH Energy 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 SH Energy will offset losses from the drop in SH Energy's long position.| SEOJEON ELECTRIC vs. Samsung Electronics Co | SEOJEON ELECTRIC vs. Samsung Electronics Co | SEOJEON ELECTRIC vs. Hyundai Motor Co | SEOJEON ELECTRIC vs. Hyundai Motor |
| SH Energy vs. Settlebank | SH Energy vs. Samsung Life Insurance | SH Energy vs. KB Financial Group | SH Energy vs. Dongbu Insurance 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |