Correlation Between Seoul Semiconductor and T3 Entertainment

Can any of the company-specific risk be diversified away by investing in both Seoul Semiconductor and T3 Entertainment 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 Seoul Semiconductor and T3 Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Seoul Semiconductor Co and T3 Entertainment Co, you can compare the effects of market volatilities on Seoul Semiconductor and T3 Entertainment 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 Seoul Semiconductor with a short position of T3 Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Semiconductor and T3 Entertainment.

Diversification Opportunities for Seoul Semiconductor and T3 Entertainment

-0.57

Correlation Coefficient

Seoul Semiconductor  T3 Entertainment

Excellent diversification

The 3 months correlation between Seoul and 204610 is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Semiconductor Co and T3 Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T3 Entertainment and Seoul Semiconductor 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 Seoul Semiconductor Co are associated (or correlated) with T3 Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T3 Entertainment has no effect on the direction of Seoul Semiconductor i.e., Seoul Semiconductor and T3 Entertainment go up and down completely randomly.

Pair Corralation between Seoul Semiconductor and T3 Entertainment

Assuming the 90 days trading horizon Seoul Semiconductor Co is expected to under-perform the T3 Entertainment. In addition to that, Seoul Semiconductor is 1.22 times more volatile than T3 Entertainment Co. It trades about -0.09 of its total potential returns per unit of risk. T3 Entertainment Co is currently generating about 0.17 per unit of volatility. If you would invest  120,600  in T3 Entertainment Co on September 12, 2024 and sell it today you would earn a total of  32,500  from holding T3 Entertainment Co or generate 26.95% return on investment over 90 days.

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

Seoul Semiconductor Co  vs.  T3 Entertainment Co

Seoul Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Seoul Semiconductor 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.

T3 Entertainment

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in T3 Entertainment Co are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, T3 Entertainment sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Seoul Semiconductor and T3 Entertainment

The main advantage of trading using opposite Seoul Semiconductor and T3 Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Semiconductor position performs unexpectedly, T3 Entertainment 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 T3 Entertainment will offset losses from the drop in T3 Entertainment's long position.

The idea behind Seoul Semiconductor Co and T3 Entertainment 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.