Correlation Between SeAH Besteel and SKONEC Entertainment

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

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

Diversification Opportunities for SeAH Besteel and SKONEC Entertainment

-0.48

Correlation Coefficient

SeAH Besteel  SKONEC Entertainment

Very good diversification

The 3 months correlation between SeAH and SKONEC is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding SeAH Besteel Corp and SKONEC Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SKONEC Entertainment and SeAH Besteel 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 Besteel Corp are associated (or correlated) with SKONEC Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SKONEC Entertainment has no effect on the direction of SeAH Besteel i.e., SeAH Besteel and SKONEC Entertainment go up and down completely randomly.

Pair Corralation between SeAH Besteel and SKONEC Entertainment

Assuming the 90 days trading horizon SeAH Besteel Corp is expected to under-perform the SKONEC Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, SeAH Besteel Corp is 2.76 times less risky than SKONEC Entertainment. The stock trades about -0.05 of its potential returns per unit of risk. The SKONEC Entertainment Co is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest  312,000  in SKONEC Entertainment Co on October 26, 2024 and sell it today you would earn a total of  112,000  from holding SKONEC Entertainment Co or generate 35.9% return on investment over 90 days.

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

SeAH Besteel Corp  vs.  SKONEC Entertainment Co

SeAH Besteel Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SeAH Besteel Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, SeAH Besteel is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SKONEC Entertainment

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SKONEC Entertainment Co are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SKONEC Entertainment sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SeAH Besteel and SKONEC Entertainment

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

The idea behind SeAH Besteel Corp and SKONEC Entertainment 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.