Correlation Between Shinsegae Information and Heungkuk Metaltech
Can any of the company-specific risk be diversified away by investing in both Shinsegae Information and Heungkuk Metaltech 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 Shinsegae Information and Heungkuk Metaltech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinsegae Information Communication and Heungkuk Metaltech CoLtd, you can compare the effects of market volatilities on Shinsegae Information and Heungkuk Metaltech 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 Shinsegae Information with a short position of Heungkuk Metaltech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Information and Heungkuk Metaltech.
Diversification Opportunities for Shinsegae Information and Heungkuk Metaltech
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shinsegae and Heungkuk is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Information Communic and Heungkuk Metaltech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heungkuk Metaltech CoLtd and Shinsegae Information 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 Shinsegae Information Communication are associated (or correlated) with Heungkuk Metaltech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heungkuk Metaltech CoLtd has no effect on the direction of Shinsegae Information i.e., Shinsegae Information and Heungkuk Metaltech go up and down completely randomly.
Pair Corralation between Shinsegae Information and Heungkuk Metaltech
Assuming the 90 days trading horizon Shinsegae Information Communication is expected to generate 1.77 times more return on investment than Heungkuk Metaltech. However, Shinsegae Information is 1.77 times more volatile than Heungkuk Metaltech CoLtd. It trades about 0.06 of its potential returns per unit of risk. Heungkuk Metaltech CoLtd is currently generating about 0.06 per unit of risk. If you would invest 995,000 in Shinsegae Information Communication on September 24, 2024 and sell it today you would earn a total of 85,000 from holding Shinsegae Information Communication or generate 8.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Shinsegae Information Communic vs. Heungkuk Metaltech CoLtd
Performance |
Timeline |
Shinsegae Information |
Heungkuk Metaltech CoLtd |
Shinsegae Information and Heungkuk Metaltech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shinsegae Information and Heungkuk Metaltech
The main advantage of trading using opposite Shinsegae Information and Heungkuk Metaltech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Information position performs unexpectedly, Heungkuk Metaltech 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 Heungkuk Metaltech will offset losses from the drop in Heungkuk Metaltech's long position.Shinsegae Information vs. AptaBio Therapeutics | Shinsegae Information vs. Wonbang Tech Co | Shinsegae Information vs. Busan Industrial Co | Shinsegae Information vs. Busan Ind |
Heungkuk Metaltech vs. Korea Alcohol Industrial | Heungkuk Metaltech vs. Shinsegae Information Communication | Heungkuk Metaltech vs. Sejong Telecom | Heungkuk Metaltech vs. Nice Information Telecommunication |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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