Correlation Between Ubiquoss Holdings and Seojin System

Can any of the company-specific risk be diversified away by investing in both Ubiquoss Holdings and Seojin System 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 Ubiquoss Holdings and Seojin System into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ubiquoss Holdings and Seojin System CoLtd, you can compare the effects of market volatilities on Ubiquoss Holdings and Seojin System 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 Ubiquoss Holdings with a short position of Seojin System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ubiquoss Holdings and Seojin System.

Diversification Opportunities for Ubiquoss Holdings and Seojin System

-0.09

Correlation Coefficient

Ubiquoss Holdings  Seojin System

Good diversification

The 3 months correlation between Ubiquoss and Seojin is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ubiquoss Holdings and Seojin System CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seojin System CoLtd and Ubiquoss Holdings 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 Ubiquoss Holdings are associated (or correlated) with Seojin System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seojin System CoLtd has no effect on the direction of Ubiquoss Holdings i.e., Ubiquoss Holdings and Seojin System go up and down completely randomly.

Pair Corralation between Ubiquoss Holdings and Seojin System

Assuming the 90 days trading horizon Ubiquoss Holdings is expected to under-perform the Seojin System. But the stock apears to be less risky and, when comparing its historical volatility, Ubiquoss Holdings is 2.73 times less risky than Seojin System. The stock trades about -0.05 of its potential returns per unit of risk. The Seojin System CoLtd is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,540,000  in Seojin System CoLtd on September 12, 2024 and sell it today you would earn a total of  250,000  from holding Seojin System CoLtd or generate 9.84% return on investment over 90 days.

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

Ubiquoss Holdings  vs.  Seojin System CoLtd

Ubiquoss Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Seojin System CoLtd

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Seojin System CoLtd are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Seojin System sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ubiquoss Holdings and Seojin System

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

The idea behind Ubiquoss Holdings and Seojin System CoLtd 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.