Correlation Between Seah Steel and Global Standard
Can any of the company-specific risk be diversified away by investing in both Seah Steel and Global Standard 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 Global Standard 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 Global Standard Technology, you can compare the effects of market volatilities on Seah Steel and Global Standard 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 Global Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seah Steel and Global Standard.
Diversification Opportunities for Seah Steel and Global Standard
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seah and Global is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Seah Steel Corp and Global Standard Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Standard Tech 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 Global Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Standard Tech has no effect on the direction of Seah Steel i.e., Seah Steel and Global Standard go up and down completely randomly.
Pair Corralation between Seah Steel and Global Standard
Assuming the 90 days trading horizon Seah Steel Corp is expected to generate 1.3 times more return on investment than Global Standard. However, Seah Steel is 1.3 times more volatile than Global Standard Technology. It trades about 0.34 of its potential returns per unit of risk. Global Standard Technology is currently generating about 0.39 per unit of risk. If you would invest 11,880,000 in Seah Steel Corp on November 1, 2024 and sell it today you would earn a total of 2,320,000 from holding Seah Steel Corp or generate 19.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seah Steel Corp vs. Global Standard Technology
Performance |
| Timeline |
| Seah Steel Corp |
| Global Standard Tech |
Seah Steel and Global Standard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seah Steel and Global Standard
The main advantage of trading using opposite Seah Steel and Global Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seah Steel position performs unexpectedly, Global Standard 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 Global Standard will offset losses from the drop in Global Standard's long position.| Seah Steel vs. Sewoon Medical Co | Seah Steel vs. Dongbu Insurance Co | Seah Steel vs. Korean Reinsurance Co | Seah Steel vs. Jeju Beer Co |
| Global Standard vs. Hankuk Steel Wire | Global Standard vs. Seah Steel Corp | Global Standard vs. Korea Steel Co | Global Standard vs. Hironic 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |