Correlation Between SEOJEON ELECTRIC and UNISEM
Can any of the company-specific risk be diversified away by investing in both SEOJEON ELECTRIC and UNISEM 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 UNISEM 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 UNISEM Co, you can compare the effects of market volatilities on SEOJEON ELECTRIC and UNISEM 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 UNISEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEOJEON ELECTRIC and UNISEM.
Diversification Opportunities for SEOJEON ELECTRIC and UNISEM
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SEOJEON and UNISEM is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding SEOJEON ELECTRIC MACHINERY and UNISEM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNISEM 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 UNISEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNISEM has no effect on the direction of SEOJEON ELECTRIC i.e., SEOJEON ELECTRIC and UNISEM go up and down completely randomly.
Pair Corralation between SEOJEON ELECTRIC and UNISEM
Assuming the 90 days trading horizon SEOJEON ELECTRIC MACHINERY is expected to generate 1.85 times more return on investment than UNISEM. However, SEOJEON ELECTRIC is 1.85 times more volatile than UNISEM Co. It trades about 0.33 of its potential returns per unit of risk. UNISEM Co is currently generating about 0.3 per unit of risk. If you would invest 402,500 in SEOJEON ELECTRIC MACHINERY on October 25, 2024 and sell it today you would earn a total of 119,500 from holding SEOJEON ELECTRIC MACHINERY or generate 29.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEOJEON ELECTRIC MACHINERY vs. UNISEM Co
Performance |
| Timeline |
| SEOJEON ELECTRIC MAC |
| UNISEM |
SEOJEON ELECTRIC and UNISEM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEOJEON ELECTRIC and UNISEM
The main advantage of trading using opposite SEOJEON ELECTRIC and UNISEM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEOJEON ELECTRIC position performs unexpectedly, UNISEM 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 UNISEM will offset losses from the drop in UNISEM's long position.| SEOJEON ELECTRIC vs. Samsung Electronics Co | SEOJEON ELECTRIC vs. Samsung Electronics Co | SEOJEON ELECTRIC vs. KB Financial Group | SEOJEON ELECTRIC vs. Shinhan Financial Group |
| UNISEM vs. SEOJEON ELECTRIC MACHINERY | UNISEM vs. Organic Special Pet | UNISEM vs. CJ Seafood Corp | UNISEM vs. Kyeryong Construction Industrial |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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