Correlation Between SEOJEON ELECTRIC and Seoam Machinery
Can any of the company-specific risk be diversified away by investing in both SEOJEON ELECTRIC and Seoam Machinery 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 Seoam Machinery 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 Seoam Machinery Industry, you can compare the effects of market volatilities on SEOJEON ELECTRIC and Seoam Machinery 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 Seoam Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEOJEON ELECTRIC and Seoam Machinery.
Diversification Opportunities for SEOJEON ELECTRIC and Seoam Machinery
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between SEOJEON and Seoam is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding SEOJEON ELECTRIC MACHINERY and Seoam Machinery Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoam Machinery Industry 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 Seoam Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoam Machinery Industry has no effect on the direction of SEOJEON ELECTRIC i.e., SEOJEON ELECTRIC and Seoam Machinery go up and down completely randomly.
Pair Corralation between SEOJEON ELECTRIC and Seoam Machinery
Assuming the 90 days trading horizon SEOJEON ELECTRIC MACHINERY is expected to under-perform the Seoam Machinery. In addition to that, SEOJEON ELECTRIC is 1.44 times more volatile than Seoam Machinery Industry. It trades about -0.04 of its total potential returns per unit of risk. Seoam Machinery Industry is currently generating about -0.04 per unit of volatility. If you would invest 486,000 in Seoam Machinery Industry on September 2, 2024 and sell it today you would lose (101,500) from holding Seoam Machinery Industry or give up 20.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEOJEON ELECTRIC MACHINERY vs. Seoam Machinery Industry
Performance |
| Timeline |
| SEOJEON ELECTRIC MAC |
| Seoam Machinery Industry |
SEOJEON ELECTRIC and Seoam Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEOJEON ELECTRIC and Seoam Machinery
The main advantage of trading using opposite SEOJEON ELECTRIC and Seoam Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEOJEON ELECTRIC position performs unexpectedly, Seoam Machinery 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 Seoam Machinery will offset losses from the drop in Seoam Machinery's long position.| SEOJEON ELECTRIC vs. Korea New Network | SEOJEON ELECTRIC vs. ICD Co | SEOJEON ELECTRIC vs. DYPNF CoLtd | SEOJEON ELECTRIC vs. Busan Industrial Co |
| Seoam Machinery vs. Display Tech Co | Seoam Machinery vs. Youl Chon Chemical | Seoam Machinery vs. Digital Power Communications | Seoam Machinery vs. Sung Bo Chemicals |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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