Correlation Between Seoyon Topmetal and KT Submarine

Can any of the company-specific risk be diversified away by investing in both Seoyon Topmetal and KT Submarine 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 Seoyon Topmetal and KT Submarine into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Seoyon Topmetal and KT Submarine

0.09

Correlation Coefficient

Seoyon Topmetal  KT Submarine

Significant diversification

The 3 months correlation between Seoyon and 060370 is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Seoyon Topmetal Co and KT Submarine Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Submarine Telecom and Seoyon Topmetal 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 Seoyon Topmetal Co are associated (or correlated) with KT Submarine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KT Submarine Telecom has no effect on the direction of Seoyon Topmetal i.e., Seoyon Topmetal and KT Submarine go up and down completely randomly.

Pair Corralation between Seoyon Topmetal and KT Submarine

Assuming the 90 days trading horizon Seoyon Topmetal Co is expected to generate 0.63 times more return on investment than KT Submarine. However, Seoyon Topmetal Co is 1.58 times less risky than KT Submarine. It trades about -0.05 of its potential returns per unit of risk. KT Submarine Telecom is currently generating about -0.03 per unit of risk. If you would invest  370,000  in Seoyon Topmetal Co on October 4, 2024 and sell it today you would lose (31,000) from holding Seoyon Topmetal Co or give up 8.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Seoyon Topmetal Co  vs.  KT Submarine Telecom

Seoyon Topmetal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Seoyon Topmetal 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.

KT Submarine Telecom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KT Submarine Telecom 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 Seoyon Topmetal and KT Submarine

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

The idea behind Seoyon Topmetal Co and KT Submarine Telecom 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .