Correlation Between Sejong Telecom and Heungkuk Metaltech
Can any of the company-specific risk be diversified away by investing in both Sejong Telecom and Heungkuk Metaltech 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 Sejong Telecom and Heungkuk Metaltech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sejong Telecom and Heungkuk Metaltech CoLtd, you can compare the effects of market volatilities on Sejong Telecom and Heungkuk Metaltech 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 Sejong Telecom with a short position of Heungkuk Metaltech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sejong Telecom and Heungkuk Metaltech.
Diversification Opportunities for Sejong Telecom and Heungkuk Metaltech
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sejong and Heungkuk is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sejong Telecom and Heungkuk Metaltech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heungkuk Metaltech CoLtd and Sejong Telecom 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 Sejong Telecom are associated (or correlated) with Heungkuk Metaltech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heungkuk Metaltech CoLtd has no effect on the direction of Sejong Telecom i.e., Sejong Telecom and Heungkuk Metaltech go up and down completely randomly.
Pair Corralation between Sejong Telecom and Heungkuk Metaltech
Assuming the 90 days trading horizon Sejong Telecom is expected to under-perform the Heungkuk Metaltech. But the stock apears to be less risky and, when comparing its historical volatility, Sejong Telecom is 1.79 times less risky than Heungkuk Metaltech. The stock trades about -0.39 of its potential returns per unit of risk. The Heungkuk Metaltech CoLtd is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 479,500 in Heungkuk Metaltech CoLtd on September 24, 2024 and sell it today you would earn a total of 40,500 from holding Heungkuk Metaltech CoLtd or generate 8.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sejong Telecom vs. Heungkuk Metaltech CoLtd
Performance |
Timeline |
Sejong Telecom |
Heungkuk Metaltech CoLtd |
Sejong Telecom and Heungkuk Metaltech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sejong Telecom and Heungkuk Metaltech
The main advantage of trading using opposite Sejong Telecom and Heungkuk Metaltech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sejong Telecom position performs unexpectedly, Heungkuk Metaltech 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 Heungkuk Metaltech will offset losses from the drop in Heungkuk Metaltech's long position.Sejong Telecom vs. Sam Chun Dang | Sejong Telecom vs. SAMRYOONG CoLtd | Sejong Telecom vs. BYON Co | Sejong Telecom vs. Sangsangin Co |
Heungkuk Metaltech vs. Korea Alcohol Industrial | Heungkuk Metaltech vs. Shinsegae Information Communication | Heungkuk Metaltech vs. Sejong Telecom | Heungkuk Metaltech vs. Nice Information Telecommunication |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |