Correlation Between New Perspective and Sejong Telecom
Can any of the company-specific risk be diversified away by investing in both New Perspective 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 New Perspective and Sejong Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Perspective Fund and Sejong Telecom, you can compare the effects of market volatilities on New Perspective 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 New Perspective with a short position of Sejong Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Perspective and Sejong Telecom.
Diversification Opportunities for New Perspective and Sejong Telecom
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between New and Sejong is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding New Perspective Fund and Sejong Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sejong Telecom and New Perspective 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 New Perspective Fund 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 New Perspective i.e., New Perspective and Sejong Telecom go up and down completely randomly.
Pair Corralation between New Perspective and Sejong Telecom
Assuming the 90 days horizon New Perspective is expected to generate 9.44 times less return on investment than Sejong Telecom. But when comparing it to its historical volatility, New Perspective Fund is 2.53 times less risky than Sejong Telecom. It trades about 0.05 of its potential returns per unit of risk. Sejong Telecom is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 39,400 in Sejong Telecom on October 23, 2024 and sell it today you would earn a total of 2,300 from holding Sejong Telecom or generate 5.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Perspective Fund vs. Sejong Telecom
Performance |
| Timeline |
| New Perspective |
| Sejong Telecom |
New Perspective and Sejong Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Perspective and Sejong Telecom
The main advantage of trading using opposite New Perspective and Sejong Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Perspective 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.| New Perspective vs. Growth Fund Of | New Perspective vs. American Funds Fundamental | New Perspective vs. Investment Of America | New Perspective vs. Smallcap World Fund |
| Sejong Telecom vs. Sam Chun Dang | Sejong Telecom vs. SAMRYOONG CoLtd | Sejong Telecom vs. BYON Co | Sejong Telecom vs. Sangsangin 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |