Correlation Between KB No4 and Seoam Machinery
Can any of the company-specific risk be diversified away by investing in both KB No4 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 KB No4 and Seoam Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KB No4 SPAC and Seoam Machinery Industry, you can compare the effects of market volatilities on KB No4 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 KB No4 with a short position of Seoam Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB No4 and Seoam Machinery.
Diversification Opportunities for KB No4 and Seoam Machinery
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between 205500 and Seoam is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding KB No4 SPAC 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 KB No4 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 KB No4 SPAC 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 KB No4 i.e., KB No4 and Seoam Machinery go up and down completely randomly.
Pair Corralation between KB No4 and Seoam Machinery
Assuming the 90 days trading horizon KB No4 SPAC is expected to under-perform the Seoam Machinery. In addition to that, KB No4 is 1.27 times more volatile than Seoam Machinery Industry. It trades about -0.03 of its total potential returns per unit of risk. Seoam Machinery Industry is currently generating about -0.03 per unit of volatility. If you would invest 594,899 in Seoam Machinery Industry on September 14, 2024 and sell it today you would lose (241,399) from holding Seoam Machinery Industry or give up 40.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
KB No4 SPAC vs. Seoam Machinery Industry
Performance |
| Timeline |
| KB No4 SPAC |
| Seoam Machinery Industry |
KB No4 and Seoam Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB No4 and Seoam Machinery
The main advantage of trading using opposite KB No4 and Seoam Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB No4 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.| KB No4 vs. Seoam Machinery Industry | KB No4 vs. Daou Data Corp | KB No4 vs. SCI Information Service | KB No4 vs. Seohee Construction Co |
| Seoam Machinery vs. Rainbow Robotics | Seoam Machinery vs. COWINTECH Co | Seoam Machinery vs. CS BEARING CoLtd | Seoam Machinery vs. Young Poong Precision |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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