Correlation Between Aprogen Healthcare and Seoul Food

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

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

Diversification Opportunities for Aprogen Healthcare and Seoul Food

0.43

Correlation Coefficient

Aprogen Healthcare  Seoul Food

Very weak diversification

The 3 months correlation between Aprogen and Seoul is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Aprogen Healthcare Games 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 Aprogen Healthcare 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 Aprogen Healthcare Games 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 Aprogen Healthcare i.e., Aprogen Healthcare and Seoul Food go up and down completely randomly.

Pair Corralation between Aprogen Healthcare and Seoul Food

Assuming the 90 days trading horizon Aprogen Healthcare Games is expected to under-perform the Seoul Food. In addition to that, Aprogen Healthcare is 3.25 times more volatile than Seoul Food Industrial. It trades about -0.03 of its total potential returns per unit of risk. Seoul Food Industrial is currently generating about -0.05 per unit of volatility. If you would invest  21,300  in Seoul Food Industrial on October 3, 2024 and sell it today you would lose (6,500) from holding Seoul Food Industrial or give up 30.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.97%
Values	Daily Returns

Aprogen Healthcare Games  vs.  Seoul Food Industrial

Aprogen Healthcare Games

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aprogen Healthcare Games has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Aprogen Healthcare is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Seoul Food Industrial

Risk-Adjusted Performance

0 of 100

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 Aprogen Healthcare and Seoul Food

The main advantage of trading using opposite Aprogen Healthcare and Seoul Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aprogen Healthcare 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 Aprogen Healthcare Games 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.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..