Correlation Between ZUM Internet and Semyung Electric
Can any of the company-specific risk be diversified away by investing in both ZUM Internet and Semyung Electric 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 ZUM Internet and Semyung Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZUM Internet Corp and Semyung Electric Machinery, you can compare the effects of market volatilities on ZUM Internet and Semyung Electric 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 ZUM Internet with a short position of Semyung Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZUM Internet and Semyung Electric.
Diversification Opportunities for ZUM Internet and Semyung Electric
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ZUM and Semyung is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding ZUM Internet Corp and Semyung Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semyung Electric Mac and ZUM Internet 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 ZUM Internet Corp are associated (or correlated) with Semyung Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semyung Electric Mac has no effect on the direction of ZUM Internet i.e., ZUM Internet and Semyung Electric go up and down completely randomly.
Pair Corralation between ZUM Internet and Semyung Electric
Assuming the 90 days trading horizon ZUM Internet Corp is expected to generate 2.47 times more return on investment than Semyung Electric. However, ZUM Internet is 2.47 times more volatile than Semyung Electric Machinery. It trades about 0.26 of its potential returns per unit of risk. Semyung Electric Machinery is currently generating about -0.11 per unit of risk. If you would invest 164,900 in ZUM Internet Corp on August 31, 2024 and sell it today you would earn a total of 84,100 from holding ZUM Internet Corp or generate 51.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZUM Internet Corp vs. Semyung Electric Machinery
Performance |
| Timeline |
| ZUM Internet Corp |
| Semyung Electric Mac |
ZUM Internet and Semyung Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZUM Internet and Semyung Electric
The main advantage of trading using opposite ZUM Internet and Semyung Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZUM Internet position performs unexpectedly, Semyung Electric 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 Semyung Electric will offset losses from the drop in Semyung Electric's long position.| ZUM Internet vs. Kakao Games Corp | ZUM Internet vs. Devsisters corporation | ZUM Internet vs. Konan Technology | ZUM Internet vs. Nice Information Telecommunication |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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