Correlation Between Seah Steel and HyVision System
Can any of the company-specific risk be diversified away by investing in both Seah Steel and HyVision System 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 HyVision System 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 HyVision System, you can compare the effects of market volatilities on Seah Steel and HyVision System 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 HyVision System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seah Steel and HyVision System.
Diversification Opportunities for Seah Steel and HyVision System
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Seah and HyVision is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Seah Steel Corp and HyVision System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HyVision System 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 HyVision System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HyVision System has no effect on the direction of Seah Steel i.e., Seah Steel and HyVision System go up and down completely randomly.
Pair Corralation between Seah Steel and HyVision System
Assuming the 90 days trading horizon Seah Steel Corp is expected to generate 1.15 times more return on investment than HyVision System. However, Seah Steel is 1.15 times more volatile than HyVision System. It trades about 0.37 of its potential returns per unit of risk. HyVision System is currently generating about 0.1 per unit of risk. If you would invest 14,700,000 in Seah Steel Corp on December 8, 2024 and sell it today you would earn a total of 4,760,000 from holding Seah Steel Corp or generate 32.38% 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. HyVision System
Performance |
| Timeline |
| Seah Steel Corp |
| HyVision System |
Seah Steel and HyVision System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seah Steel and HyVision System
The main advantage of trading using opposite Seah Steel and HyVision System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seah Steel position performs unexpectedly, HyVision System 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 HyVision System will offset losses from the drop in HyVision System's long position.| Seah Steel vs. Stic Investments | ||
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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