Correlation Between Seah Steel and Daewon Media
Can any of the company-specific risk be diversified away by investing in both Seah Steel and Daewon Media 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 Daewon Media 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 Daewon Media Co, you can compare the effects of market volatilities on Seah Steel and Daewon Media 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 Daewon Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seah Steel and Daewon Media.
Diversification Opportunities for Seah Steel and Daewon Media
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Seah and Daewon is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Seah Steel Corp and Daewon Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewon Media 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 Daewon Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewon Media has no effect on the direction of Seah Steel i.e., Seah Steel and Daewon Media go up and down completely randomly.
Pair Corralation between Seah Steel and Daewon Media
Assuming the 90 days trading horizon Seah Steel Corp is expected to generate 0.9 times more return on investment than Daewon Media. However, Seah Steel Corp is 1.11 times less risky than Daewon Media. It trades about 0.01 of its potential returns per unit of risk. Daewon Media Co is currently generating about -0.04 per unit of risk. If you would invest 13,970,000 in Seah Steel Corp on November 19, 2024 and sell it today you would earn a total of 20,000 from holding Seah Steel Corp or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seah Steel Corp vs. Daewon Media Co
Performance |
| Timeline |
| Seah Steel Corp |
| Daewon Media |
Seah Steel and Daewon Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seah Steel and Daewon Media
The main advantage of trading using opposite Seah Steel and Daewon Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seah Steel position performs unexpectedly, Daewon Media 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 Daewon Media will offset losses from the drop in Daewon Media's long position.| Seah Steel vs. J Steel Co | Seah Steel vs. Daehan Steel | Seah Steel vs. Shinhan Inverse Silver | Seah Steel vs. Sempio Foods Co |
| Daewon Media vs. INFINITT Healthcare Co | Daewon Media vs. Industrial Bank | Daewon Media vs. KakaoBank Corp | Daewon Media vs. Dongbu Insurance 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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