Correlation Between SEOJEON ELECTRIC and Playgram

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

By analyzing existing cross correlation between SEOJEON ELECTRIC MACHINERY and Playgram Co, you can compare the effects of market volatilities on SEOJEON ELECTRIC and Playgram 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 SEOJEON ELECTRIC with a short position of Playgram. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEOJEON ELECTRIC and Playgram.

Diversification Opportunities for SEOJEON ELECTRIC and Playgram

0.17

Correlation Coefficient

SEOJEON ELECTRIC  Playgram

Average diversification

The 3 months correlation between SEOJEON and Playgram is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding SEOJEON ELECTRIC MACHINERY and Playgram Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playgram and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC MACHINERY are associated (or correlated) with Playgram. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playgram has no effect on the direction of SEOJEON ELECTRIC i.e., SEOJEON ELECTRIC and Playgram go up and down completely randomly.

Pair Corralation between SEOJEON ELECTRIC and Playgram

Assuming the 90 days trading horizon SEOJEON ELECTRIC MACHINERY is expected to under-perform the Playgram. In addition to that, SEOJEON ELECTRIC is 1.05 times more volatile than Playgram Co. It trades about -0.03 of its total potential returns per unit of risk. Playgram Co is currently generating about 0.05 per unit of volatility. If you would invest  33,800  in Playgram Co on September 21, 2024 and sell it today you would earn a total of  2,300  from holding Playgram Co or generate 6.8% return on investment over 90 days.

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

SEOJEON ELECTRIC MACHINERY  vs.  Playgram Co

SEOJEON ELECTRIC MAC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SEOJEON ELECTRIC MACHINERY 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.

Playgram

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Playgram Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Playgram may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with SEOJEON ELECTRIC and Playgram

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

The idea behind SEOJEON ELECTRIC MACHINERY and Playgram 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.