Correlation Between Shinil Industrial and Seoyon Topmetal

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

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

Diversification Opportunities for Shinil Industrial and Seoyon Topmetal

0.72

Correlation Coefficient

Shinil Industrial  Seoyon Topmetal

Poor diversification

The 3 months correlation between Shinil and Seoyon is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Shinil Industrial Co and Seoyon Topmetal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoyon Topmetal and Shinil Industrial 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 Shinil Industrial Co are associated (or correlated) with Seoyon Topmetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoyon Topmetal has no effect on the direction of Shinil Industrial i.e., Shinil Industrial and Seoyon Topmetal go up and down completely randomly.

Pair Corralation between Shinil Industrial and Seoyon Topmetal

Assuming the 90 days trading horizon Shinil Industrial is expected to generate 2.07 times less return on investment than Seoyon Topmetal. But when comparing it to its historical volatility, Shinil Industrial Co is 1.51 times less risky than Seoyon Topmetal. It trades about 0.1 of its potential returns per unit of risk. Seoyon Topmetal Co is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  342,000  in Seoyon Topmetal Co on December 25, 2024 and sell it today you would earn a total of  38,000  from holding Seoyon Topmetal Co or generate 11.11% return on investment over 90 days.

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

Shinil Industrial Co  vs.  Seoyon Topmetal Co

Shinil Industrial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Shinil Industrial Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Shinil Industrial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Seoyon Topmetal

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Seoyon Topmetal Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Seoyon Topmetal may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Shinil Industrial and Seoyon Topmetal

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

The idea behind Shinil Industrial Co and Seoyon Topmetal 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.