Correlation Between Hurum and Sejong Telecom
Can any of the company-specific risk be diversified away by investing in both Hurum and Sejong Telecom 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 Hurum and Sejong Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurum Co and Sejong Telecom, you can compare the effects of market volatilities on Hurum and Sejong Telecom 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 Hurum with a short position of Sejong Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurum and Sejong Telecom.
Diversification Opportunities for Hurum and Sejong Telecom
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hurum and Sejong is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Hurum Co and Sejong Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sejong Telecom and Hurum 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 Hurum Co are associated (or correlated) with Sejong Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sejong Telecom has no effect on the direction of Hurum i.e., Hurum and Sejong Telecom go up and down completely randomly.
Pair Corralation between Hurum and Sejong Telecom
Assuming the 90 days trading horizon Hurum Co is expected to generate 0.88 times more return on investment than Sejong Telecom. However, Hurum Co is 1.14 times less risky than Sejong Telecom. It trades about 0.14 of its potential returns per unit of risk. Sejong Telecom is currently generating about 0.05 per unit of risk. If you would invest 69,900 in Hurum Co on October 12, 2024 and sell it today you would earn a total of 3,100 from holding Hurum Co or generate 4.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hurum Co vs. Sejong Telecom
Performance |
| Timeline |
| Hurum |
| Sejong Telecom |
Hurum and Sejong Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hurum and Sejong Telecom
The main advantage of trading using opposite Hurum and Sejong Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurum position performs unexpectedly, Sejong Telecom 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 Sejong Telecom will offset losses from the drop in Sejong Telecom's long position.| Hurum vs. Handok Clean Tech | Hurum vs. TOPMATERIAL LTD | Hurum vs. Polaris Office Corp | Hurum vs. RF Materials Co |
| Sejong Telecom vs. Xavis Co | Sejong Telecom vs. Hurum Co | Sejong Telecom vs. Daishin Balance No8 | Sejong Telecom vs. Korea Real Estate |
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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