Correlation Between SeAH Bestee and SAMRYOONG CoLtd

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

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

Diversification Opportunities for SeAH Bestee and SAMRYOONG CoLtd

-0.47

Correlation Coefficient

SeAH Bestee  SAMRYOONG CoLtd

Very good diversification

The 3 months correlation between SeAH and SAMRYOONG is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding SeAH Bestee and SAMRYOONG CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAMRYOONG CoLtd 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 SAMRYOONG CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAMRYOONG CoLtd has no effect on the direction of SeAH Bestee i.e., SeAH Bestee and SAMRYOONG CoLtd go up and down completely randomly.

Pair Corralation between SeAH Bestee and SAMRYOONG CoLtd

Assuming the 90 days trading horizon SeAH Bestee is expected to generate 2.87 times more return on investment than SAMRYOONG CoLtd. However, SeAH Bestee is 2.87 times more volatile than SAMRYOONG CoLtd. It trades about 0.08 of its potential returns per unit of risk. SAMRYOONG CoLtd is currently generating about -0.13 per unit of risk. If you would invest  1,950,000  in SeAH Bestee on September 4, 2024 and sell it today you would earn a total of  300,000  from holding SeAH Bestee or generate 15.38% 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.  SAMRYOONG CoLtd

SeAH Bestee

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SeAH Bestee are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SeAH Bestee sustained solid returns over the last few months and may actually be approaching a breakup point.

SAMRYOONG CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SAMRYOONG CoLtd 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 SAMRYOONG CoLtd

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

The idea behind SeAH Bestee and SAMRYOONG 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.