Correlation Between PH Tech and Seojin Automotive
Can any of the company-specific risk be diversified away by investing in both PH Tech and Seojin Automotive 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 PH Tech and Seojin Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PH Tech Co and Seojin Automotive CoLtd, you can compare the effects of market volatilities on PH Tech and Seojin Automotive 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 PH Tech with a short position of Seojin Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of PH Tech and Seojin Automotive.
Diversification Opportunities for PH Tech and Seojin Automotive
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 239890 and Seojin is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding PH Tech Co and Seojin Automotive CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seojin Automotive CoLtd and PH Tech 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 PH Tech Co are associated (or correlated) with Seojin Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seojin Automotive CoLtd has no effect on the direction of PH Tech i.e., PH Tech and Seojin Automotive go up and down completely randomly.
Pair Corralation between PH Tech and Seojin Automotive
Assuming the 90 days trading horizon PH Tech Co is expected to under-perform the Seojin Automotive. In addition to that, PH Tech is 1.43 times more volatile than Seojin Automotive CoLtd. It trades about -0.12 of its total potential returns per unit of risk. Seojin Automotive CoLtd is currently generating about -0.1 per unit of volatility. If you would invest 360,500 in Seojin Automotive CoLtd on September 14, 2024 and sell it today you would lose (174,500) from holding Seojin Automotive CoLtd or give up 48.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.62% |
| Values | Daily Returns |
PH Tech Co vs. Seojin Automotive CoLtd
Performance |
| Timeline |
| PH Tech |
| Seojin Automotive CoLtd |
PH Tech and Seojin Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PH Tech and Seojin Automotive
The main advantage of trading using opposite PH Tech and Seojin Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PH Tech position performs unexpectedly, Seojin Automotive 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 Seojin Automotive will offset losses from the drop in Seojin Automotive's long position.The idea behind PH Tech Co and Seojin Automotive CoLtd 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.| Seojin Automotive vs. Lion Chemtech Co | Seojin Automotive vs. PH Tech Co | Seojin Automotive vs. Jeju Air Co | Seojin Automotive vs. Korea Investment Holdings |
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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