Correlation Between Seah Steel and Woori Technology
Can any of the company-specific risk be diversified away by investing in both Seah Steel and Woori Technology 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 Seah Steel and Woori Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seah Steel Corp and Woori Technology, you can compare the effects of market volatilities on Seah Steel and Woori Technology 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 Seah Steel with a short position of Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seah Steel and Woori Technology.
Diversification Opportunities for Seah Steel and Woori Technology
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seah and Woori is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Seah Steel Corp and Woori Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Technology and Seah Steel 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 Seah Steel Corp are associated (or correlated) with Woori Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woori Technology has no effect on the direction of Seah Steel i.e., Seah Steel and Woori Technology go up and down completely randomly.
Pair Corralation between Seah Steel and Woori Technology
Assuming the 90 days trading horizon Seah Steel Corp is expected to generate 0.63 times more return on investment than Woori Technology. However, Seah Steel Corp is 1.58 times less risky than Woori Technology. It trades about 0.16 of its potential returns per unit of risk. Woori Technology is currently generating about -0.03 per unit of risk. If you would invest 11,500,000 in Seah Steel Corp on October 24, 2024 and sell it today you would earn a total of 3,120,000 from holding Seah Steel Corp or generate 27.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.77% |
| Values | Daily Returns |
Seah Steel Corp vs. Woori Technology
Performance |
| Timeline |
| Seah Steel Corp |
| Woori Technology |
Seah Steel and Woori Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seah Steel and Woori Technology
The main advantage of trading using opposite Seah Steel and Woori Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seah Steel position performs unexpectedly, Woori Technology 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 Woori Technology will offset losses from the drop in Woori Technology's long position.| Seah Steel vs. Woori Technology | Seah Steel vs. Amogreentech Co | Seah Steel vs. Orbitech Co | Seah Steel vs. iNtRON Biotechnology |
| Woori Technology vs. Kyeryong Construction Industrial | Woori Technology vs. Hyundai Engineering Construction | Woori Technology vs. ENERGYMACHINERY KOREA CoLtd | Woori Technology vs. Hotel Shilla Co |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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