Correlation Between Seoul Semiconductor and TJ Media

Can any of the company-specific risk be diversified away by investing in both Seoul Semiconductor and TJ Media 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 Seoul Semiconductor and TJ Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Seoul Semiconductor Co and TJ media Co, you can compare the effects of market volatilities on Seoul Semiconductor and TJ Media 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 Seoul Semiconductor with a short position of TJ Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Semiconductor and TJ Media.

Diversification Opportunities for Seoul Semiconductor and TJ Media

0.58

Correlation Coefficient

Seoul Semiconductor  TJ Media

Very weak diversification

The 3 months correlation between Seoul and 032540 is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Semiconductor Co and TJ media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TJ media and Seoul Semiconductor 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 Seoul Semiconductor Co are associated (or correlated) with TJ Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TJ media has no effect on the direction of Seoul Semiconductor i.e., Seoul Semiconductor and TJ Media go up and down completely randomly.

Pair Corralation between Seoul Semiconductor and TJ Media

Assuming the 90 days trading horizon Seoul Semiconductor is expected to generate 5.44 times less return on investment than TJ Media. In addition to that, Seoul Semiconductor is 1.44 times more volatile than TJ media Co. It trades about 0.02 of its total potential returns per unit of risk. TJ media Co is currently generating about 0.14 per unit of volatility. If you would invest  429,214  in TJ media Co on December 1, 2024 and sell it today you would earn a total of  42,786  from holding TJ media Co or generate 9.97% return on investment over 90 days.

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

Seoul Semiconductor Co  vs.  TJ media Co

Seoul Semiconductor

Risk-Adjusted Performance

Weak

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

TJ media

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TJ media Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, TJ Media may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Seoul Semiconductor and TJ Media

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

The idea behind Seoul Semiconductor Co and TJ media 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.