Correlation Between Seung Il and Oriental Precision
Can any of the company-specific risk be diversified away by investing in both Seung Il and Oriental Precision 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 Seung Il and Oriental Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seung Il and Oriental Precision Engineering, you can compare the effects of market volatilities on Seung Il and Oriental Precision 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 Seung Il with a short position of Oriental Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seung Il and Oriental Precision.
Diversification Opportunities for Seung Il and Oriental Precision
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Seung and Oriental is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Seung Il and Oriental Precision Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Precision and Seung Il 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 Seung Il are associated (or correlated) with Oriental Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Precision has no effect on the direction of Seung Il i.e., Seung Il and Oriental Precision go up and down completely randomly.
Pair Corralation between Seung Il and Oriental Precision
Assuming the 90 days trading horizon Seung Il is expected to generate 0.87 times more return on investment than Oriental Precision. However, Seung Il is 1.15 times less risky than Oriental Precision. It trades about 0.08 of its potential returns per unit of risk. Oriental Precision Engineering is currently generating about -0.03 per unit of risk. If you would invest 749,000 in Seung Il on September 26, 2024 and sell it today you would earn a total of 40,000 from holding Seung Il or generate 5.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.65% |
Values | Daily Returns |
Seung Il vs. Oriental Precision Engineering
Performance |
Timeline |
Seung Il |
Oriental Precision |
Seung Il and Oriental Precision Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Seung Il and Oriental Precision
The main advantage of trading using opposite Seung Il and Oriental Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seung Il position performs unexpectedly, Oriental Precision 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 Oriental Precision will offset losses from the drop in Oriental Precision's long position.Seung Il vs. Pum Tech Korea Co | Seung Il vs. Hankukpackage Co | Seung Il vs. Naver | Seung Il vs. Gyeongnam Steel Co |
Oriental Precision vs. Busan Industrial Co | Oriental Precision vs. Busan Ind | Oriental Precision vs. Mirae Asset Daewoo | Oriental Precision vs. Shinhan WTI Futures |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |