Correlation Between Shinsegae Information and Hana Technology
Can any of the company-specific risk be diversified away by investing in both Shinsegae Information and Hana Technology 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 Hana Technology 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 Hana Technology Co, you can compare the effects of market volatilities on Shinsegae Information and Hana Technology 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 Hana Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Information and Hana Technology.
Diversification Opportunities for Shinsegae Information and Hana Technology
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shinsegae and Hana is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Information Communic and Hana Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Technology 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 Hana Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Technology has no effect on the direction of Shinsegae Information i.e., Shinsegae Information and Hana Technology go up and down completely randomly.
Pair Corralation between Shinsegae Information and Hana Technology
Assuming the 90 days trading horizon Shinsegae Information Communication is expected to generate 0.46 times more return on investment than Hana Technology. However, Shinsegae Information Communication is 2.19 times less risky than Hana Technology. It trades about -0.01 of its potential returns per unit of risk. Hana Technology Co is currently generating about -0.14 per unit of risk. If you would invest 905,000 in Shinsegae Information Communication on September 15, 2024 and sell it today you would lose (22,000) from holding Shinsegae Information Communication or give up 2.43% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Shinsegae Information Communic vs. Hana Technology Co
Performance |
Timeline |
Shinsegae Information |
Hana Technology |
Shinsegae Information and Hana Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shinsegae Information and Hana Technology
The main advantage of trading using opposite Shinsegae Information and Hana Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Information position performs unexpectedly, Hana Technology 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 Hana Technology will offset losses from the drop in Hana Technology's long position.Shinsegae Information vs. Samsung Electronics Co | ||
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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