Correlation Between SEOJEON ELECTRIC and GS Engineering
Can any of the company-specific risk be diversified away by investing in both SEOJEON ELECTRIC and GS Engineering 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 GS Engineering 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 GS Engineering Construction, you can compare the effects of market volatilities on SEOJEON ELECTRIC and GS Engineering 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 GS Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEOJEON ELECTRIC and GS Engineering.
Diversification Opportunities for SEOJEON ELECTRIC and GS Engineering
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between SEOJEON and 006360 is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding SEOJEON ELECTRIC MACHINERY and GS Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Engineering Const 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 GS Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Engineering Const has no effect on the direction of SEOJEON ELECTRIC i.e., SEOJEON ELECTRIC and GS Engineering go up and down completely randomly.
Pair Corralation between SEOJEON ELECTRIC and GS Engineering
Assuming the 90 days trading horizon SEOJEON ELECTRIC MACHINERY is expected to generate 2.23 times more return on investment than GS Engineering. However, SEOJEON ELECTRIC is 2.23 times more volatile than GS Engineering Construction. It trades about 0.33 of its potential returns per unit of risk. GS Engineering Construction is currently generating about 0.08 per unit of risk. If you would invest 388,500 in SEOJEON ELECTRIC MACHINERY on November 1, 2024 and sell it today you would earn a total of 113,500 from holding SEOJEON ELECTRIC MACHINERY or generate 29.21% 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. GS Engineering Construction
Performance |
| Timeline |
| SEOJEON ELECTRIC MAC |
| GS Engineering Const |
SEOJEON ELECTRIC and GS Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEOJEON ELECTRIC and GS Engineering
The main advantage of trading using opposite SEOJEON ELECTRIC and GS Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEOJEON ELECTRIC position performs unexpectedly, GS Engineering 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 GS Engineering will offset losses from the drop in GS Engineering's long position.| SEOJEON ELECTRIC vs. DSC Investment | SEOJEON ELECTRIC vs. KTB Investment Securities | SEOJEON ELECTRIC vs. Display Tech Co | SEOJEON ELECTRIC vs. Daishin Information Communications |
| GS Engineering vs. Iljin Display | GS Engineering vs. Alton Sports CoLtd | GS Engineering vs. Moadata Co | GS Engineering vs. Lotte Data Communication |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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