Correlation Between SEOJEON ELECTRIC and System
Can any of the company-specific risk be diversified away by investing in both SEOJEON ELECTRIC and System 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 System 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 System and Application, you can compare the effects of market volatilities on SEOJEON ELECTRIC and System 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 System. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEOJEON ELECTRIC and System.
Diversification Opportunities for SEOJEON ELECTRIC and System
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SEOJEON and System is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SEOJEON ELECTRIC MACHINERY and System and Application in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on System and Application 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 System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of System and Application has no effect on the direction of SEOJEON ELECTRIC i.e., SEOJEON ELECTRIC and System go up and down completely randomly.
Pair Corralation between SEOJEON ELECTRIC and System
Assuming the 90 days trading horizon SEOJEON ELECTRIC MACHINERY is expected to generate 1.69 times more return on investment than System. However, SEOJEON ELECTRIC is 1.69 times more volatile than System and Application. It trades about 0.2 of its potential returns per unit of risk. System and Application is currently generating about -0.08 per unit of risk. If you would invest 401,000 in SEOJEON ELECTRIC MACHINERY on November 8, 2024 and sell it today you would earn a total of 67,000 from holding SEOJEON ELECTRIC MACHINERY or generate 16.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
SEOJEON ELECTRIC MACHINERY vs. System and Application
Performance |
| Timeline |
| SEOJEON ELECTRIC MAC |
| System and Application |
SEOJEON ELECTRIC and System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEOJEON ELECTRIC and System
The main advantage of trading using opposite SEOJEON ELECTRIC and System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEOJEON ELECTRIC position performs unexpectedly, System 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 System will offset losses from the drop in System's long position.| SEOJEON ELECTRIC vs. ECSTELECOM Co | SEOJEON ELECTRIC vs. Hanshin Construction Co | SEOJEON ELECTRIC vs. Seoul Electronics Telecom | SEOJEON ELECTRIC vs. Lotte Data Communication |
| System vs. SM Entertainment Co | System vs. JYP Entertainment Corp | System vs. Narae Nanotech Corp | System vs. Lion Chemtech 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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