Correlation Between Seoyon Topmetal and Puloon Technology

Can any of the company-specific risk be diversified away by investing in both Seoyon Topmetal and Puloon Technology 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 Seoyon Topmetal and Puloon Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Seoyon Topmetal Co and Puloon Technology, you can compare the effects of market volatilities on Seoyon Topmetal and Puloon Technology 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 Seoyon Topmetal with a short position of Puloon Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoyon Topmetal and Puloon Technology.

Diversification Opportunities for Seoyon Topmetal and Puloon Technology

-0.23

Correlation Coefficient

Seoyon Topmetal  Puloon Technology

Very good diversification

The 3 months correlation between Seoyon and Puloon is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Seoyon Topmetal Co and Puloon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puloon Technology and Seoyon Topmetal 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 Seoyon Topmetal Co are associated (or correlated) with Puloon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puloon Technology has no effect on the direction of Seoyon Topmetal i.e., Seoyon Topmetal and Puloon Technology go up and down completely randomly.

Pair Corralation between Seoyon Topmetal and Puloon Technology

Assuming the 90 days trading horizon Seoyon Topmetal Co is expected to under-perform the Puloon Technology. But the stock apears to be less risky and, when comparing its historical volatility, Seoyon Topmetal Co is 1.68 times less risky than Puloon Technology. The stock trades about -0.03 of its potential returns per unit of risk. The Puloon Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  655,000  in Puloon Technology on September 23, 2024 and sell it today you would earn a total of  47,000  from holding Puloon Technology or generate 7.18% return on investment over 90 days.

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

Seoyon Topmetal Co  vs.  Puloon Technology

Seoyon Topmetal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Seoyon Topmetal Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Seoyon Topmetal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Puloon Technology

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Puloon Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Puloon Technology may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Seoyon Topmetal and Puloon Technology

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

The idea behind Seoyon Topmetal Co and Puloon Technology 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.