Correlation Between Mercury and Seojin System

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

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

Diversification Opportunities for Mercury and Seojin System

-0.15

Correlation Coefficient

Mercury  Seojin System

Good diversification

The 3 months correlation between Mercury and Seojin is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Mercury and Seojin System CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seojin System CoLtd and Mercury 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 Mercury are associated (or correlated) with Seojin System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seojin System CoLtd has no effect on the direction of Mercury i.e., Mercury and Seojin System go up and down completely randomly.

Pair Corralation between Mercury and Seojin System

Assuming the 90 days trading horizon Mercury is expected to under-perform the Seojin System. But the stock apears to be less risky and, when comparing its historical volatility, Mercury is 1.15 times less risky than Seojin System. The stock trades about -0.14 of its potential returns per unit of risk. The Seojin System CoLtd is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  2,650,000  in Seojin System CoLtd on December 25, 2024 and sell it today you would lose (365,000) from holding Seojin System CoLtd or give up 13.77% of portfolio value over 90 days.

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

Mercury  vs.  Seojin System CoLtd

Mercury

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mercury has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Seojin System CoLtd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Seojin System CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Mercury and Seojin System

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

The idea behind Mercury and Seojin System CoLtd 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.