Correlation Between Eugene Technology and Seoul Food

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

By analyzing existing cross correlation between Eugene Technology CoLtd and Seoul Food Industrial, you can compare the effects of market volatilities on Eugene Technology and Seoul Food 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 Eugene Technology with a short position of Seoul Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eugene Technology and Seoul Food.

Diversification Opportunities for Eugene Technology and Seoul Food

-0.63

Correlation Coefficient

Eugene Technology  Seoul Food

Excellent diversification

The 3 months correlation between Eugene and Seoul is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Eugene Technology CoLtd and Seoul Food Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Food Industrial and Eugene 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 Eugene Technology CoLtd are associated (or correlated) with Seoul Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Food Industrial has no effect on the direction of Eugene Technology i.e., Eugene Technology and Seoul Food go up and down completely randomly.

Pair Corralation between Eugene Technology and Seoul Food

Assuming the 90 days trading horizon Eugene Technology CoLtd is expected to generate 3.65 times more return on investment than Seoul Food. However, Eugene Technology is 3.65 times more volatile than Seoul Food Industrial. It trades about 0.21 of its potential returns per unit of risk. Seoul Food Industrial is currently generating about -0.14 per unit of risk. If you would invest  3,195,000  in Eugene Technology CoLtd on December 24, 2024 and sell it today you would earn a total of  1,305,000  from holding Eugene Technology CoLtd or generate 40.85% return on investment over 90 days.

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

Eugene Technology CoLtd  vs.  Seoul Food Industrial

Eugene Technology CoLtd

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eugene Technology CoLtd are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Eugene Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Seoul Food Industrial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Seoul Food Industrial 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 Eugene Technology and Seoul Food

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

The idea behind Eugene Technology CoLtd and Seoul Food Industrial 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.