Correlation Between SKONEC Entertainment and Seoam Machinery
Can any of the company-specific risk be diversified away by investing in both SKONEC Entertainment 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 SKONEC Entertainment and Seoam Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SKONEC Entertainment Co and Seoam Machinery Industry, you can compare the effects of market volatilities on SKONEC Entertainment 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 SKONEC Entertainment with a short position of Seoam Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of SKONEC Entertainment and Seoam Machinery.
Diversification Opportunities for SKONEC Entertainment and Seoam Machinery
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SKONEC and Seoam is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding SKONEC Entertainment Co 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 SKONEC Entertainment 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 SKONEC Entertainment Co 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 SKONEC Entertainment i.e., SKONEC Entertainment and Seoam Machinery go up and down completely randomly.
Pair Corralation between SKONEC Entertainment and Seoam Machinery
Assuming the 90 days trading horizon SKONEC Entertainment Co is expected to under-perform the Seoam Machinery. In addition to that, SKONEC Entertainment is 4.27 times more volatile than Seoam Machinery Industry. It trades about -0.07 of its total potential returns per unit of risk. Seoam Machinery Industry is currently generating about 0.17 per unit of volatility. If you would invest 369,500 in Seoam Machinery Industry on November 27, 2024 and sell it today you would earn a total of 19,500 from holding Seoam Machinery Industry or generate 5.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SKONEC Entertainment Co vs. Seoam Machinery Industry
Performance |
| Timeline |
| SKONEC Entertainment |
| Seoam Machinery Industry |
SKONEC Entertainment and Seoam Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SKONEC Entertainment and Seoam Machinery
The main advantage of trading using opposite SKONEC Entertainment and Seoam Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SKONEC Entertainment 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.| SKONEC Entertainment vs. LB Investment | SKONEC Entertainment vs. Korea Investment Holdings | SKONEC Entertainment vs. Samick Musical Instruments | SKONEC Entertainment vs. Coloray International Investment |
| 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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