Correlation Between AeroSpace Technology and Sewoon Medical
Can any of the company-specific risk be diversified away by investing in both AeroSpace Technology and Sewoon Medical 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 AeroSpace Technology and Sewoon Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AeroSpace Technology of and Sewoon Medical Co, you can compare the effects of market volatilities on AeroSpace Technology and Sewoon Medical 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 AeroSpace Technology with a short position of Sewoon Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of AeroSpace Technology and Sewoon Medical.
Diversification Opportunities for AeroSpace Technology and Sewoon Medical
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AeroSpace and Sewoon is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding AeroSpace Technology of and Sewoon Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sewoon Medical and AeroSpace Technology 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 AeroSpace Technology of are associated (or correlated) with Sewoon Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sewoon Medical has no effect on the direction of AeroSpace Technology i.e., AeroSpace Technology and Sewoon Medical go up and down completely randomly.
Pair Corralation between AeroSpace Technology and Sewoon Medical
Assuming the 90 days trading horizon AeroSpace Technology of is expected to under-perform the Sewoon Medical. But the stock apears to be less risky and, when comparing its historical volatility, AeroSpace Technology of is 1.05 times less risky than Sewoon Medical. The stock trades about -0.13 of its potential returns per unit of risk. The Sewoon Medical Co is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 272,614 in Sewoon Medical Co on October 8, 2024 and sell it today you would lose (23,614) from holding Sewoon Medical Co or give up 8.66% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
AeroSpace Technology of vs. Sewoon Medical Co
Performance |
Timeline |
AeroSpace Technology |
Sewoon Medical |
AeroSpace Technology and Sewoon Medical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AeroSpace Technology and Sewoon Medical
The main advantage of trading using opposite AeroSpace Technology and Sewoon Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AeroSpace Technology position performs unexpectedly, Sewoon Medical 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 Sewoon Medical will offset losses from the drop in Sewoon Medical's long position.AeroSpace Technology vs. Sajo Seafood | AeroSpace Technology vs. Handok Clean Tech | AeroSpace Technology vs. Hyundai Green Food | AeroSpace Technology vs. Nable Communications |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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