Correlation Between SEOJEON ELECTRIC and Bosung Power
Can any of the company-specific risk be diversified away by investing in both SEOJEON ELECTRIC and Bosung Power 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 Bosung Power 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 Bosung Power Technology, you can compare the effects of market volatilities on SEOJEON ELECTRIC and Bosung Power 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 Bosung Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEOJEON ELECTRIC and Bosung Power.
Diversification Opportunities for SEOJEON ELECTRIC and Bosung Power
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SEOJEON and Bosung is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding SEOJEON ELECTRIC MACHINERY and Bosung Power Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bosung Power Technology 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 Bosung Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bosung Power Technology has no effect on the direction of SEOJEON ELECTRIC i.e., SEOJEON ELECTRIC and Bosung Power go up and down completely randomly.
Pair Corralation between SEOJEON ELECTRIC and Bosung Power
Assuming the 90 days trading horizon SEOJEON ELECTRIC MACHINERY is expected to generate 2.04 times more return on investment than Bosung Power. However, SEOJEON ELECTRIC is 2.04 times more volatile than Bosung Power Technology. It trades about 0.33 of its potential returns per unit of risk. Bosung Power Technology is currently generating about 0.48 per unit of risk. If you would invest 386,500 in SEOJEON ELECTRIC MACHINERY on October 30, 2024 and sell it today you would earn a total of 115,500 from holding SEOJEON ELECTRIC MACHINERY or generate 29.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEOJEON ELECTRIC MACHINERY vs. Bosung Power Technology
Performance |
| Timeline |
| SEOJEON ELECTRIC MAC |
| Bosung Power Technology |
SEOJEON ELECTRIC and Bosung Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEOJEON ELECTRIC and Bosung Power
The main advantage of trading using opposite SEOJEON ELECTRIC and Bosung Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEOJEON ELECTRIC position performs unexpectedly, Bosung Power 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 Bosung Power will offset losses from the drop in Bosung Power's long position.| SEOJEON ELECTRIC vs. PJ Metal Co | SEOJEON ELECTRIC vs. Ssangyong Information Communication | SEOJEON ELECTRIC vs. Digital Power Communications | SEOJEON ELECTRIC vs. CG Hi Tech |
| Bosung Power vs. TJ media Co | Bosung Power vs. SKONEC Entertainment Co | Bosung Power vs. Samlip General Foods | Bosung Power vs. MEDIANA CoLtd |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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