Correlation Between SEOJEON ELECTRIC and Korea Shipbuilding
Can any of the company-specific risk be diversified away by investing in both SEOJEON ELECTRIC and Korea Shipbuilding 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 Korea Shipbuilding 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 Korea Shipbuilding Offshore, you can compare the effects of market volatilities on SEOJEON ELECTRIC and Korea Shipbuilding 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 Korea Shipbuilding. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEOJEON ELECTRIC and Korea Shipbuilding.
Diversification Opportunities for SEOJEON ELECTRIC and Korea Shipbuilding
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between SEOJEON and Korea is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding SEOJEON ELECTRIC MACHINERY and Korea Shipbuilding Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Shipbuilding 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 Korea Shipbuilding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Shipbuilding has no effect on the direction of SEOJEON ELECTRIC i.e., SEOJEON ELECTRIC and Korea Shipbuilding go up and down completely randomly.
Pair Corralation between SEOJEON ELECTRIC and Korea Shipbuilding
Assuming the 90 days trading horizon SEOJEON ELECTRIC is expected to generate 14.77 times less return on investment than Korea Shipbuilding. In addition to that, SEOJEON ELECTRIC is 1.58 times more volatile than Korea Shipbuilding Offshore. It trades about 0.0 of its total potential returns per unit of risk. Korea Shipbuilding Offshore is currently generating about 0.1 per unit of volatility. If you would invest 8,150,000 in Korea Shipbuilding Offshore on October 27, 2024 and sell it today you would earn a total of 14,700,000 from holding Korea Shipbuilding Offshore or generate 180.37% 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. Korea Shipbuilding Offshore
Performance |
| Timeline |
| SEOJEON ELECTRIC MAC |
| Korea Shipbuilding |
SEOJEON ELECTRIC and Korea Shipbuilding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEOJEON ELECTRIC and Korea Shipbuilding
The main advantage of trading using opposite SEOJEON ELECTRIC and Korea Shipbuilding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEOJEON ELECTRIC position performs unexpectedly, Korea Shipbuilding 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 Korea Shipbuilding will offset losses from the drop in Korea Shipbuilding's long position.| SEOJEON ELECTRIC vs. TS Investment Corp | SEOJEON ELECTRIC vs. Daelim Trading Co | SEOJEON ELECTRIC vs. Korea Investment Holdings | SEOJEON ELECTRIC vs. Insung Information Co |
| Korea Shipbuilding vs. Nature and Environment | Korea Shipbuilding vs. Daehan Steel | Korea Shipbuilding vs. Moonbae Steel | Korea Shipbuilding vs. BGF Retail 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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