Correlation Between Raontech and Sewoon Medical
Can any of the company-specific risk be diversified away by investing in both Raontech and Sewoon Medical 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 Raontech and Sewoon Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Raontech and Sewoon Medical Co, you can compare the effects of market volatilities on Raontech and Sewoon Medical 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 Raontech with a short position of Sewoon Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raontech and Sewoon Medical.
Diversification Opportunities for Raontech and Sewoon Medical
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Raontech and Sewoon is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Raontech and Sewoon Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sewoon Medical and Raontech 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 Raontech are associated (or correlated) with Sewoon Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sewoon Medical has no effect on the direction of Raontech i.e., Raontech and Sewoon Medical go up and down completely randomly.
Pair Corralation between Raontech and Sewoon Medical
Assuming the 90 days trading horizon Raontech is expected to generate 2.15 times more return on investment than Sewoon Medical. However, Raontech is 2.15 times more volatile than Sewoon Medical Co. It trades about -0.01 of its potential returns per unit of risk. Sewoon Medical Co is currently generating about -0.04 per unit of risk. If you would invest 320,000 in Raontech on November 8, 2024 and sell it today you would lose (21,000) from holding Raontech or give up 6.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Raontech vs. Sewoon Medical Co
Performance |
| Timeline |
| Raontech |
| Sewoon Medical |
Raontech and Sewoon Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raontech and Sewoon Medical
The main advantage of trading using opposite Raontech and Sewoon Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raontech position performs unexpectedly, Sewoon Medical 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 Sewoon Medical will offset losses from the drop in Sewoon Medical's long position.| Raontech vs. Seoul Food Industrial | Raontech vs. Jeong Moon Information | Raontech vs. DoubleU Games Co | Raontech vs. Ssangyong Information Communication |
| Sewoon Medical vs. PJ Metal Co | Sewoon Medical vs. Kbi Metal Co | Sewoon Medical vs. YeaRimDang Publishing Co | Sewoon Medical vs. Hanjoo Light Metal |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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