Correlation Between Sebo Manufacturing and KT Submarine

Can any of the company-specific risk be diversified away by investing in both Sebo Manufacturing and KT Submarine 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 KT Submarine 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 KT Submarine Co, you can compare the effects of market volatilities on Sebo Manufacturing and KT Submarine 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 KT Submarine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sebo Manufacturing and KT Submarine.

Diversification Opportunities for Sebo Manufacturing and KT Submarine

-0.73

Correlation Coefficient

Sebo Manufacturing  KT Submarine

Pay attention - limited upside

The 3 months correlation between Sebo and 060370 is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Sebo Manufacturing Engineering and KT Submarine Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Submarine 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 KT Submarine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KT Submarine has no effect on the direction of Sebo Manufacturing i.e., Sebo Manufacturing and KT Submarine go up and down completely randomly.

Pair Corralation between Sebo Manufacturing and KT Submarine

Assuming the 90 days trading horizon Sebo Manufacturing Engineering is expected to generate 0.73 times more return on investment than KT Submarine. However, Sebo Manufacturing Engineering is 1.36 times less risky than KT Submarine. It trades about 0.21 of its potential returns per unit of risk. KT Submarine Co is currently generating about 0.08 per unit of risk. If you would invest  1,009,000  in Sebo Manufacturing Engineering on September 13, 2024 and sell it today you would earn a total of  196,000  from holding Sebo Manufacturing Engineering or generate 19.43% return on investment over 90 days.

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

Sebo Manufacturing Engineering  vs.  KT Submarine 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.

KT Submarine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KT Submarine Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Sebo Manufacturing and KT Submarine

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

The idea behind Sebo Manufacturing Engineering and KT Submarine 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.