Correlation Between SeAH Bestee and OCI Co

Can any of the company-specific risk be diversified away by investing in both SeAH Bestee and OCI Co 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 SeAH Bestee and OCI Co into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for SeAH Bestee and OCI Co

-0.58

Correlation Coefficient

SeAH Bestee  OCI Co

Excellent diversification

The 3 months correlation between SeAH and OCI is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding SeAH Bestee and OCI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OCI Co and SeAH Bestee 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 SeAH Bestee are associated (or correlated) with OCI Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OCI Co has no effect on the direction of SeAH Bestee i.e., SeAH Bestee and OCI Co go up and down completely randomly.

Pair Corralation between SeAH Bestee and OCI Co

Assuming the 90 days trading horizon SeAH Bestee is expected to under-perform the OCI Co. In addition to that, SeAH Bestee is 1.31 times more volatile than OCI Co. It trades about -0.1 of its total potential returns per unit of risk. OCI Co is currently generating about 0.15 per unit of volatility. If you would invest  5,660,000  in OCI Co on September 14, 2024 and sell it today you would earn a total of  520,000  from holding OCI Co or generate 9.19% return on investment over 90 days.

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

SeAH Bestee  vs.  OCI Co

SeAH Bestee

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SeAH Bestee are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SeAH Bestee may actually be approaching a critical reversion point that can send shares even higher in January 2025.

OCI Co

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OCI Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with SeAH Bestee and OCI Co

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

The idea behind SeAH Bestee and OCI 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 Commodity Directory module to find actively traded commodities issued by global exchanges.