Correlation Between Korea Closed and Seafarer Overseas
Can any of the company-specific risk be diversified away by investing in both Korea Closed and Seafarer Overseas 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 Korea Closed and Seafarer Overseas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Closed and Seafarer Overseas Growth, you can compare the effects of market volatilities on Korea Closed and Seafarer Overseas 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 Korea Closed with a short position of Seafarer Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Closed and Seafarer Overseas.
Diversification Opportunities for Korea Closed and Seafarer Overseas
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korea and Seafarer is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Korea Closed and Seafarer Overseas Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seafarer Overseas Growth and Korea Closed 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 Korea Closed are associated (or correlated) with Seafarer Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seafarer Overseas Growth has no effect on the direction of Korea Closed i.e., Korea Closed and Seafarer Overseas go up and down completely randomly.
Pair Corralation between Korea Closed and Seafarer Overseas
Allowing for the 90-day total investment horizon Korea Closed is expected to under-perform the Seafarer Overseas. In addition to that, Korea Closed is 2.09 times more volatile than Seafarer Overseas Growth. It trades about -0.16 of its total potential returns per unit of risk. Seafarer Overseas Growth is currently generating about -0.11 per unit of volatility. If you would invest 1,243 in Seafarer Overseas Growth on September 2, 2024 and sell it today you would lose (21.00) from holding Seafarer Overseas Growth or give up 1.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Closed vs. Seafarer Overseas Growth
Performance |
| Timeline |
| Korea Closed |
| Seafarer Overseas Growth |
Korea Closed and Seafarer Overseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Closed and Seafarer Overseas
The main advantage of trading using opposite Korea Closed and Seafarer Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Closed position performs unexpectedly, Seafarer Overseas 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 Seafarer Overseas will offset losses from the drop in Seafarer Overseas' long position.| Korea Closed vs. Mexico Equity And | Korea Closed vs. Western Asset Global | Korea Closed vs. New Germany Closed | Korea Closed vs. MFS Charter Income |
| Seafarer Overseas vs. Alliancebernstein Global High | Seafarer Overseas vs. Legg Mason Partners | Seafarer Overseas vs. Ab Global Risk | Seafarer Overseas vs. Needham Aggressive Growth |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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