Correlation Between SEOJEON ELECTRIC and Korea Information
Can any of the company-specific risk be diversified away by investing in both SEOJEON ELECTRIC and Korea Information 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 Information 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 Information Communications, you can compare the effects of market volatilities on SEOJEON ELECTRIC and Korea Information 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 Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEOJEON ELECTRIC and Korea Information.
Diversification Opportunities for SEOJEON ELECTRIC and Korea Information
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SEOJEON and Korea is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding SEOJEON ELECTRIC MACHINERY and Korea Information Communicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information 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 Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of SEOJEON ELECTRIC i.e., SEOJEON ELECTRIC and Korea Information go up and down completely randomly.
Pair Corralation between SEOJEON ELECTRIC and Korea Information
Assuming the 90 days trading horizon SEOJEON ELECTRIC MACHINERY is expected to generate 5.91 times more return on investment than Korea Information. However, SEOJEON ELECTRIC is 5.91 times more volatile than Korea Information Communications. It trades about 0.19 of its potential returns per unit of risk. Korea Information Communications is currently generating about -0.02 per unit of risk. If you would invest 402,000 in SEOJEON ELECTRIC MACHINERY on November 5, 2024 and sell it today you would earn a total of 63,000 from holding SEOJEON ELECTRIC MACHINERY or generate 15.67% 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. Korea Information Communicatio
Performance |
| Timeline |
| SEOJEON ELECTRIC MAC |
| Korea Information |
SEOJEON ELECTRIC and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEOJEON ELECTRIC and Korea Information
The main advantage of trading using opposite SEOJEON ELECTRIC and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEOJEON ELECTRIC position performs unexpectedly, Korea Information 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 Information will offset losses from the drop in Korea Information's long position.| SEOJEON ELECTRIC vs. Samsung Card Co | SEOJEON ELECTRIC vs. EBEST Investment Securities | SEOJEON ELECTRIC vs. Koh Young Technology | SEOJEON ELECTRIC vs. Hansol Chemica |
| Korea Information vs. Samsung Electronics Co | Korea Information vs. Samsung Electronics Co | Korea Information vs. Hyundai Motor Co | Korea Information vs. Hyundai Motor |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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