Correlation Between Humasis and Seohee Construction
Can any of the company-specific risk be diversified away by investing in both Humasis and Seohee Construction 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 Humasis and Seohee Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humasis Co and Seohee Construction Co, you can compare the effects of market volatilities on Humasis and Seohee Construction 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 Humasis with a short position of Seohee Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humasis and Seohee Construction.
Diversification Opportunities for Humasis and Seohee Construction
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Humasis and Seohee is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Humasis Co and Seohee Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seohee Construction and Humasis 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 Humasis Co are associated (or correlated) with Seohee Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seohee Construction has no effect on the direction of Humasis i.e., Humasis and Seohee Construction go up and down completely randomly.
Pair Corralation between Humasis and Seohee Construction
Assuming the 90 days trading horizon Humasis Co is expected to generate 3.66 times more return on investment than Seohee Construction. However, Humasis is 3.66 times more volatile than Seohee Construction Co. It trades about 0.03 of its potential returns per unit of risk. Seohee Construction Co is currently generating about 0.03 per unit of risk. If you would invest 179,900 in Humasis Co on August 28, 2024 and sell it today you would earn a total of 8,600 from holding Humasis Co or generate 4.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humasis Co vs. Seohee Construction Co
Performance |
| Timeline |
| Humasis |
| Seohee Construction |
Humasis and Seohee Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humasis and Seohee Construction
The main advantage of trading using opposite Humasis and Seohee Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humasis position performs unexpectedly, Seohee Construction 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 Seohee Construction will offset losses from the drop in Seohee Construction's long position.The idea behind Humasis Co and Seohee Construction Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Seohee Construction vs. KCC Engineering Construction | Seohee Construction vs. Samchuly Bicycle Co | Seohee Construction vs. SFA Engineering | Seohee Construction vs. SEOHAN Const EngcoLtd |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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