Correlation Between Seah Steel and Sangsin Energy
Can any of the company-specific risk be diversified away by investing in both Seah Steel and Sangsin Energy 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 Seah Steel and Sangsin Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seah Steel Corp and Sangsin Energy Display, you can compare the effects of market volatilities on Seah Steel and Sangsin Energy 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 Seah Steel with a short position of Sangsin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seah Steel and Sangsin Energy.
Diversification Opportunities for Seah Steel and Sangsin Energy
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seah and Sangsin is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Seah Steel Corp and Sangsin Energy Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsin Energy Display and Seah Steel 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 Seah Steel Corp are associated (or correlated) with Sangsin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsin Energy Display has no effect on the direction of Seah Steel i.e., Seah Steel and Sangsin Energy go up and down completely randomly.
Pair Corralation between Seah Steel and Sangsin Energy
Assuming the 90 days trading horizon Seah Steel Corp is expected to generate 0.6 times more return on investment than Sangsin Energy. However, Seah Steel Corp is 1.66 times less risky than Sangsin Energy. It trades about 0.01 of its potential returns per unit of risk. Sangsin Energy Display is currently generating about -0.04 per unit of risk. If you would invest 13,590,000 in Seah Steel Corp on October 25, 2024 and sell it today you would earn a total of 120,000 from holding Seah Steel Corp or generate 0.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Seah Steel Corp vs. Sangsin Energy Display
Performance |
Timeline |
Seah Steel Corp |
Sangsin Energy Display |
Seah Steel and Sangsin Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Seah Steel and Sangsin Energy
The main advantage of trading using opposite Seah Steel and Sangsin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seah Steel position performs unexpectedly, Sangsin Energy 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 Sangsin Energy will offset losses from the drop in Sangsin Energy's long position.Seah Steel vs. Ajusteel Co | Seah Steel vs. Ni Steel | Seah Steel vs. Korea Steel Co | Seah Steel vs. Samwon Steel |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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