Correlation Between Seah Steel and SCI Information
Can any of the company-specific risk be diversified away by investing in both Seah Steel and SCI Information 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 SCI Information 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 SCI Information Service, you can compare the effects of market volatilities on Seah Steel and SCI Information 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 SCI Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seah Steel and SCI Information.
Diversification Opportunities for Seah Steel and SCI Information
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seah and SCI is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Seah Steel Corp and SCI Information Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCI Information Service 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 SCI Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCI Information Service has no effect on the direction of Seah Steel i.e., Seah Steel and SCI Information go up and down completely randomly.
Pair Corralation between Seah Steel and SCI Information
Assuming the 90 days trading horizon Seah Steel is expected to generate 1.66 times less return on investment than SCI Information. In addition to that, Seah Steel is 1.04 times more volatile than SCI Information Service. It trades about 0.06 of its total potential returns per unit of risk. SCI Information Service is currently generating about 0.1 per unit of volatility. If you would invest 210,500 in SCI Information Service on September 13, 2024 and sell it today you would earn a total of 8,000 from holding SCI Information Service or generate 3.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seah Steel Corp vs. SCI Information Service
Performance |
| Timeline |
| Seah Steel Corp |
| SCI Information Service |
Seah Steel and SCI Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seah Steel and SCI Information
The main advantage of trading using opposite Seah Steel and SCI Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seah Steel position performs unexpectedly, SCI Information 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 SCI Information will offset losses from the drop in SCI Information's long position.| Seah Steel vs. Dong Il Steel | Seah Steel vs. Ni Steel | Seah Steel vs. Korea Steel Co | Seah Steel vs. Bookook Steel |
| SCI Information vs. KB Financial Group | SCI Information vs. Shinhan Financial Group | SCI Information vs. Hana Financial | SCI Information vs. Woori Financial Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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