Correlation Between QUALITAS SEMICONDUCTOR and Seoul Semiconductor

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

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

Diversification Opportunities for QUALITAS SEMICONDUCTOR and Seoul Semiconductor

0.77

Correlation Coefficient

QUALITAS SEMICONDUCTOR  Seoul Semiconductor

Poor diversification

The 3 months correlation between QUALITAS and Seoul is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding QUALITAS SEMICONDUCTOR LTD and Seoul Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Semiconductor and QUALITAS 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 QUALITAS SEMICONDUCTOR LTD are associated (or correlated) with Seoul Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Semiconductor has no effect on the direction of QUALITAS SEMICONDUCTOR i.e., QUALITAS SEMICONDUCTOR and Seoul Semiconductor go up and down completely randomly.

Pair Corralation between QUALITAS SEMICONDUCTOR and Seoul Semiconductor

Assuming the 90 days trading horizon QUALITAS SEMICONDUCTOR LTD is expected to under-perform the Seoul Semiconductor. In addition to that, QUALITAS SEMICONDUCTOR is 1.43 times more volatile than Seoul Semiconductor Co. It trades about -0.11 of its total potential returns per unit of risk. Seoul Semiconductor Co is currently generating about -0.14 per unit of volatility. If you would invest  919,000  in Seoul Semiconductor Co on September 4, 2024 and sell it today you would lose (224,000) from holding Seoul Semiconductor Co or give up 24.37% of portfolio value over 90 days.

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

QUALITAS SEMICONDUCTOR LTD  vs.  Seoul Semiconductor Co

QUALITAS SEMICONDUCTOR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days QUALITAS SEMICONDUCTOR LTD 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.

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.

Pair Trading with QUALITAS SEMICONDUCTOR and Seoul Semiconductor

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

The idea behind QUALITAS SEMICONDUCTOR LTD and Seoul Semiconductor 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..