Correlation Between SEOJEON ELECTRIC and Air Busan
Can any of the company-specific risk be diversified away by investing in both SEOJEON ELECTRIC and Air Busan 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 Air Busan 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 Air Busan Co, you can compare the effects of market volatilities on SEOJEON ELECTRIC and Air Busan 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 Air Busan. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEOJEON ELECTRIC and Air Busan.
Diversification Opportunities for SEOJEON ELECTRIC and Air Busan
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between SEOJEON and Air is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding SEOJEON ELECTRIC MACHINERY and Air Busan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Busan 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 Air Busan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Busan has no effect on the direction of SEOJEON ELECTRIC i.e., SEOJEON ELECTRIC and Air Busan go up and down completely randomly.
Pair Corralation between SEOJEON ELECTRIC and Air Busan
Assuming the 90 days trading horizon SEOJEON ELECTRIC is expected to generate 7.52 times less return on investment than Air Busan. In addition to that, SEOJEON ELECTRIC is 1.54 times more volatile than Air Busan Co. It trades about 0.0 of its total potential returns per unit of risk. Air Busan Co is currently generating about 0.01 per unit of volatility. If you would invest 228,000 in Air Busan Co on August 27, 2024 and sell it today you would earn a total of 5,000 from holding Air Busan Co or generate 2.19% 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. Air Busan Co
Performance |
| Timeline |
| SEOJEON ELECTRIC MAC |
| Air Busan |
SEOJEON ELECTRIC and Air Busan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEOJEON ELECTRIC and Air Busan
The main advantage of trading using opposite SEOJEON ELECTRIC and Air Busan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEOJEON ELECTRIC position performs unexpectedly, Air Busan 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 Air Busan will offset losses from the drop in Air Busan's long position.| SEOJEON ELECTRIC vs. Samsung Electronics Co | SEOJEON ELECTRIC vs. Samsung Electronics Co | SEOJEON ELECTRIC vs. Hyundai Motor Co | SEOJEON ELECTRIC vs. Hyundai Motor |
| Air Busan vs. Busan Industrial Co | Air Busan vs. Busan Ind | Air Busan vs. Mirae Asset Daewoo | Air Busan vs. UNISEM 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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