Correlation Between Yooshin Engineering and SEOHAN Const

Can any of the company-specific risk be diversified away by investing in both Yooshin Engineering and SEOHAN Const 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 Yooshin Engineering and SEOHAN Const into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Yooshin Engineering and SEOHAN Const EngcoLtd, you can compare the effects of market volatilities on Yooshin Engineering and SEOHAN Const 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 Yooshin Engineering with a short position of SEOHAN Const. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yooshin Engineering and SEOHAN Const.

Diversification Opportunities for Yooshin Engineering and SEOHAN Const

-0.38

Correlation Coefficient

Yooshin Engineering  SEOHAN Const

Very good diversification

The 3 months correlation between Yooshin and SEOHAN is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Yooshin Engineering and SEOHAN Const EngcoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEOHAN Const EngcoLtd and Yooshin Engineering 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 Yooshin Engineering are associated (or correlated) with SEOHAN Const. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEOHAN Const EngcoLtd has no effect on the direction of Yooshin Engineering i.e., Yooshin Engineering and SEOHAN Const go up and down completely randomly.

Pair Corralation between Yooshin Engineering and SEOHAN Const

Assuming the 90 days trading horizon Yooshin Engineering is expected to generate 2.13 times more return on investment than SEOHAN Const. However, Yooshin Engineering is 2.13 times more volatile than SEOHAN Const EngcoLtd. It trades about 0.06 of its potential returns per unit of risk. SEOHAN Const EngcoLtd is currently generating about 0.0 per unit of risk. If you would invest  2,110,000  in Yooshin Engineering on September 6, 2024 and sell it today you would earn a total of  175,000  from holding Yooshin Engineering or generate 8.29% return on investment over 90 days.

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

Yooshin Engineering  vs.  SEOHAN Const EngcoLtd

Yooshin Engineering

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Yooshin Engineering are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Yooshin Engineering may actually be approaching a critical reversion point that can send shares even higher in January 2025.

SEOHAN Const EngcoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Yooshin Engineering and SEOHAN Const

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

The idea behind Yooshin Engineering and SEOHAN Const EngcoLtd 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.