Correlation Between SEOJEON ELECTRIC and Asia Technology
Can any of the company-specific risk be diversified away by investing in both SEOJEON ELECTRIC and Asia Technology 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 Asia Technology 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 Asia Technology Co, you can compare the effects of market volatilities on SEOJEON ELECTRIC and Asia Technology 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 Asia Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEOJEON ELECTRIC and Asia Technology.
Diversification Opportunities for SEOJEON ELECTRIC and Asia Technology
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SEOJEON and Asia is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding SEOJEON ELECTRIC MACHINERY and Asia Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Technology 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 Asia Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Technology has no effect on the direction of SEOJEON ELECTRIC i.e., SEOJEON ELECTRIC and Asia Technology go up and down completely randomly.
Pair Corralation between SEOJEON ELECTRIC and Asia Technology
Assuming the 90 days trading horizon SEOJEON ELECTRIC MACHINERY is expected to generate 2.28 times more return on investment than Asia Technology. However, SEOJEON ELECTRIC is 2.28 times more volatile than Asia Technology Co. It trades about 0.0 of its potential returns per unit of risk. Asia Technology Co is currently generating about -0.03 per unit of risk. If you would invest 663,000 in SEOJEON ELECTRIC MACHINERY on October 26, 2024 and sell it today you would lose (161,000) from holding SEOJEON ELECTRIC MACHINERY or give up 24.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEOJEON ELECTRIC MACHINERY vs. Asia Technology Co
Performance |
| Timeline |
| SEOJEON ELECTRIC MAC |
| Asia Technology |
SEOJEON ELECTRIC and Asia Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEOJEON ELECTRIC and Asia Technology
The main advantage of trading using opposite SEOJEON ELECTRIC and Asia Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEOJEON ELECTRIC position performs unexpectedly, Asia Technology 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 Asia Technology will offset losses from the drop in Asia Technology'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 |
| Asia Technology vs. Hana Financial | Asia Technology vs. Jb Financial | Asia Technology vs. Polaris Office Corp | Asia Technology vs. Dgb Financial |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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