Correlation Between Seoyon Topmetal and LabGenomics

Can any of the company-specific risk be diversified away by investing in both Seoyon Topmetal and LabGenomics 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 LabGenomics 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 LabGenomics Co, you can compare the effects of market volatilities on Seoyon Topmetal and LabGenomics 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 LabGenomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoyon Topmetal and LabGenomics.

Diversification Opportunities for Seoyon Topmetal and LabGenomics

0.22

Correlation Coefficient

Seoyon Topmetal  LabGenomics

Modest diversification

The 3 months correlation between Seoyon and LabGenomics is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Seoyon Topmetal Co and LabGenomics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LabGenomics 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 LabGenomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LabGenomics has no effect on the direction of Seoyon Topmetal i.e., Seoyon Topmetal and LabGenomics go up and down completely randomly.

Pair Corralation between Seoyon Topmetal and LabGenomics

Assuming the 90 days trading horizon Seoyon Topmetal is expected to generate 808.0 times less return on investment than LabGenomics. But when comparing it to its historical volatility, Seoyon Topmetal Co is 2.13 times less risky than LabGenomics. It trades about 0.0 of its potential returns per unit of risk. LabGenomics Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  284,000  in LabGenomics Co on December 4, 2024 and sell it today you would lose (16,000) from holding LabGenomics Co or give up 5.63% of portfolio value over 90 days.

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

Seoyon Topmetal Co  vs.  LabGenomics Co

Seoyon Topmetal

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Seoyon Topmetal Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Seoyon Topmetal sustained solid returns over the last few months and may actually be approaching a breakup point.

LabGenomics

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LabGenomics Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, LabGenomics sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Seoyon Topmetal and LabGenomics

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

The idea behind Seoyon Topmetal Co and LabGenomics 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.