Correlation Between Sebo Manufacturing and Samil Enterprise

Can any of the company-specific risk be diversified away by investing in both Sebo Manufacturing and Samil Enterprise 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 Sebo Manufacturing and Samil Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sebo Manufacturing Engineering and Samil Enterprise Co, you can compare the effects of market volatilities on Sebo Manufacturing and Samil Enterprise 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 Sebo Manufacturing with a short position of Samil Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sebo Manufacturing and Samil Enterprise.

Diversification Opportunities for Sebo Manufacturing and Samil Enterprise

0.41

Correlation Coefficient

Sebo Manufacturing  Samil Enterprise

Very weak diversification

The 3 months correlation between Sebo and Samil is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sebo Manufacturing Engineering and Samil Enterprise Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samil Enterprise and Sebo Manufacturing 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 Sebo Manufacturing Engineering are associated (or correlated) with Samil Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samil Enterprise has no effect on the direction of Sebo Manufacturing i.e., Sebo Manufacturing and Samil Enterprise go up and down completely randomly.

Pair Corralation between Sebo Manufacturing and Samil Enterprise

Assuming the 90 days trading horizon Sebo Manufacturing is expected to generate 2.12 times less return on investment than Samil Enterprise. In addition to that, Sebo Manufacturing is 1.53 times more volatile than Samil Enterprise Co. It trades about 0.09 of its total potential returns per unit of risk. Samil Enterprise Co is currently generating about 0.29 per unit of volatility. If you would invest  287,500  in Samil Enterprise Co on September 13, 2024 and sell it today you would earn a total of  75,500  from holding Samil Enterprise Co or generate 26.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Sebo Manufacturing Engineering  vs.  Samil Enterprise Co

Sebo Manufacturing

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sebo Manufacturing Engineering are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sebo Manufacturing may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Samil Enterprise

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Samil Enterprise Co are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samil Enterprise sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sebo Manufacturing and Samil Enterprise

The main advantage of trading using opposite Sebo Manufacturing and Samil Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sebo Manufacturing position performs unexpectedly, Samil Enterprise 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 Samil Enterprise will offset losses from the drop in Samil Enterprise's long position.

The idea behind Sebo Manufacturing Engineering and Samil Enterprise Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.