Correlation Between Semyung Electric and Jeong Moon
Can any of the company-specific risk be diversified away by investing in both Semyung Electric and Jeong Moon 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 Semyung Electric and Jeong Moon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Semyung Electric Machinery and Jeong Moon Information, you can compare the effects of market volatilities on Semyung Electric and Jeong Moon 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 Semyung Electric with a short position of Jeong Moon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semyung Electric and Jeong Moon.
Diversification Opportunities for Semyung Electric and Jeong Moon
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Semyung and Jeong is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Semyung Electric Machinery and Jeong Moon Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeong Moon Information and Semyung Electric 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 Semyung Electric Machinery are associated (or correlated) with Jeong Moon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeong Moon Information has no effect on the direction of Semyung Electric i.e., Semyung Electric and Jeong Moon go up and down completely randomly.
Pair Corralation between Semyung Electric and Jeong Moon
Assuming the 90 days trading horizon Semyung Electric Machinery is expected to generate 1.1 times more return on investment than Jeong Moon. However, Semyung Electric is 1.1 times more volatile than Jeong Moon Information. It trades about 0.17 of its potential returns per unit of risk. Jeong Moon Information is currently generating about -0.02 per unit of risk. If you would invest 423,485 in Semyung Electric Machinery on October 5, 2024 and sell it today you would earn a total of 54,515 from holding Semyung Electric Machinery or generate 12.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Semyung Electric Machinery vs. Jeong Moon Information
Performance |
Timeline |
Semyung Electric Mac |
Jeong Moon Information |
Semyung Electric and Jeong Moon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Semyung Electric and Jeong Moon
The main advantage of trading using opposite Semyung Electric and Jeong Moon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semyung Electric position performs unexpectedly, Jeong Moon 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 Jeong Moon will offset losses from the drop in Jeong Moon's long position.Semyung Electric vs. Seoyon Topmetal Co | Semyung Electric vs. Daejung Chemicals Metals | Semyung Electric vs. Worldex Industry Trading | Semyung Electric vs. Kbi Metal Co |
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Check out your portfolio center.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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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