Correlation Between Seers Technology and Shinsegae Food

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

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

Diversification Opportunities for Seers Technology and Shinsegae Food

-0.59

Correlation Coefficient

Seers Technology  Shinsegae Food

Excellent diversification

The 3 months correlation between Seers and Shinsegae is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Seers Technology and Shinsegae Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Food and Seers 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 Seers Technology are associated (or correlated) with Shinsegae Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Food has no effect on the direction of Seers Technology i.e., Seers Technology and Shinsegae Food go up and down completely randomly.

Pair Corralation between Seers Technology and Shinsegae Food

Assuming the 90 days trading horizon Seers Technology is expected to generate 2.02 times more return on investment than Shinsegae Food. However, Seers Technology is 2.02 times more volatile than Shinsegae Food. It trades about 0.14 of its potential returns per unit of risk. Shinsegae Food is currently generating about -0.17 per unit of risk. If you would invest  1,052,000  in Seers Technology on December 26, 2024 and sell it today you would earn a total of  347,000  from holding Seers Technology or generate 32.98% return on investment over 90 days.

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

Seers Technology  vs.  Shinsegae Food

Seers Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Seers Technology are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Seers Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Shinsegae Food

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shinsegae Food 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 Seers Technology and Shinsegae Food

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

The idea behind Seers Technology and Shinsegae Food 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.