Correlation Between SEOJEON ELECTRIC and Youngsin Metal
Can any of the company-specific risk be diversified away by investing in both SEOJEON ELECTRIC and Youngsin Metal 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 Youngsin Metal 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 Youngsin Metal Industrial, you can compare the effects of market volatilities on SEOJEON ELECTRIC and Youngsin Metal 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 Youngsin Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEOJEON ELECTRIC and Youngsin Metal.
Diversification Opportunities for SEOJEON ELECTRIC and Youngsin Metal
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SEOJEON and Youngsin is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding SEOJEON ELECTRIC MACHINERY and Youngsin Metal Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngsin Metal Industrial 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 Youngsin Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youngsin Metal Industrial has no effect on the direction of SEOJEON ELECTRIC i.e., SEOJEON ELECTRIC and Youngsin Metal go up and down completely randomly.
Pair Corralation between SEOJEON ELECTRIC and Youngsin Metal
Assuming the 90 days trading horizon SEOJEON ELECTRIC MACHINERY is expected to generate 0.78 times more return on investment than Youngsin Metal. However, SEOJEON ELECTRIC MACHINERY is 1.28 times less risky than Youngsin Metal. It trades about 0.33 of its potential returns per unit of risk. Youngsin Metal Industrial is currently generating about 0.25 per unit of risk. If you would invest 335,000 in SEOJEON ELECTRIC MACHINERY on October 9, 2024 and sell it today you would earn a total of 67,000 from holding SEOJEON ELECTRIC MACHINERY or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEOJEON ELECTRIC MACHINERY vs. Youngsin Metal Industrial
Performance |
| Timeline |
| SEOJEON ELECTRIC MAC |
| Youngsin Metal Industrial |
SEOJEON ELECTRIC and Youngsin Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEOJEON ELECTRIC and Youngsin Metal
The main advantage of trading using opposite SEOJEON ELECTRIC and Youngsin Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEOJEON ELECTRIC position performs unexpectedly, Youngsin Metal 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 Youngsin Metal will offset losses from the drop in Youngsin Metal's long position.| SEOJEON ELECTRIC vs. Top Material Co | SEOJEON ELECTRIC vs. Korean Reinsurance Co | SEOJEON ELECTRIC vs. Union Materials Corp | SEOJEON ELECTRIC vs. LAKE MATERIALS LTD |
| Youngsin Metal vs. Digital Multimedia Technology | Youngsin Metal vs. SAMG Entertainment Co | Youngsin Metal vs. J Steel Co | Youngsin Metal vs. Daewon Media 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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