Correlation Between SEOJEON ELECTRIC and Yura Tech
Can any of the company-specific risk be diversified away by investing in both SEOJEON ELECTRIC and Yura Tech 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 Yura Tech 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 Yura Tech Co, you can compare the effects of market volatilities on SEOJEON ELECTRIC and Yura Tech 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 Yura Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEOJEON ELECTRIC and Yura Tech.
Diversification Opportunities for SEOJEON ELECTRIC and Yura Tech
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SEOJEON and Yura is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding SEOJEON ELECTRIC MACHINERY and Yura Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yura Tech 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 Yura Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yura Tech has no effect on the direction of SEOJEON ELECTRIC i.e., SEOJEON ELECTRIC and Yura Tech go up and down completely randomly.
Pair Corralation between SEOJEON ELECTRIC and Yura Tech
Assuming the 90 days trading horizon SEOJEON ELECTRIC MACHINERY is expected to generate 2.25 times more return on investment than Yura Tech. However, SEOJEON ELECTRIC is 2.25 times more volatile than Yura Tech Co. It trades about 0.33 of its potential returns per unit of risk. Yura Tech Co is currently generating about 0.23 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEOJEON ELECTRIC MACHINERY vs. Yura Tech Co
Performance |
| Timeline |
| SEOJEON ELECTRIC MAC |
| Yura Tech |
SEOJEON ELECTRIC and Yura Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEOJEON ELECTRIC and Yura Tech
The main advantage of trading using opposite SEOJEON ELECTRIC and Yura Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEOJEON ELECTRIC position performs unexpectedly, Yura Tech 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 Yura Tech will offset losses from the drop in Yura Tech'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 |
| Yura Tech vs. Samsung Electronics Co | Yura Tech vs. Samsung Electronics Co | Yura Tech vs. KB Financial Group | Yura Tech vs. Shinhan Financial Group |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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