Correlation Between APS Holdings and Shinsegae Information

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

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

Diversification Opportunities for APS Holdings and Shinsegae Information

0.46

Correlation Coefficient

APS Holdings  Shinsegae Information

Very weak diversification

The 3 months correlation between APS and Shinsegae is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding APS Holdings and Shinsegae Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Information and APS Holdings 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 APS Holdings are associated (or correlated) with Shinsegae Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Information has no effect on the direction of APS Holdings i.e., APS Holdings and Shinsegae Information go up and down completely randomly.

Pair Corralation between APS Holdings and Shinsegae Information

Assuming the 90 days trading horizon APS Holdings is expected to generate 1.03 times more return on investment than Shinsegae Information. However, APS Holdings is 1.03 times more volatile than Shinsegae Information Communication. It trades about 0.03 of its potential returns per unit of risk. Shinsegae Information Communication is currently generating about -0.04 per unit of risk. If you would invest  550,000  in APS Holdings on September 4, 2024 and sell it today you would earn a total of  11,000  from holding APS Holdings or generate 2.0% return on investment over 90 days.

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

APS Holdings  vs.  Shinsegae Information Communic

APS Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in APS Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, APS Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Shinsegae Information

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shinsegae Information Communication has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Shinsegae Information is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with APS Holdings and Shinsegae Information

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

The idea behind APS Holdings and Shinsegae Information Communication 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.

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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.