Correlation Between Daehan Steel and Shinil Electronics
Can any of the company-specific risk be diversified away by investing in both Daehan Steel and Shinil Electronics 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 Daehan Steel and Shinil Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daehan Steel and Shinil Electronics Co, you can compare the effects of market volatilities on Daehan Steel and Shinil Electronics 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 Daehan Steel with a short position of Shinil Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daehan Steel and Shinil Electronics.
Diversification Opportunities for Daehan Steel and Shinil Electronics
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daehan and Shinil is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Daehan Steel and Shinil Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinil Electronics and Daehan Steel 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 Daehan Steel are associated (or correlated) with Shinil Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinil Electronics has no effect on the direction of Daehan Steel i.e., Daehan Steel and Shinil Electronics go up and down completely randomly.
Pair Corralation between Daehan Steel and Shinil Electronics
Assuming the 90 days trading horizon Daehan Steel is expected to generate 1.78 times more return on investment than Shinil Electronics. However, Daehan Steel is 1.78 times more volatile than Shinil Electronics Co. It trades about 0.01 of its potential returns per unit of risk. Shinil Electronics Co is currently generating about -0.19 per unit of risk. If you would invest 1,661,000 in Daehan Steel on October 24, 2024 and sell it today you would earn a total of 3,000 from holding Daehan Steel or generate 0.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Daehan Steel vs. Shinil Electronics Co
Performance |
Timeline |
Daehan Steel |
Shinil Electronics |
Daehan Steel and Shinil Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Daehan Steel and Shinil Electronics
The main advantage of trading using opposite Daehan Steel and Shinil Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daehan Steel position performs unexpectedly, Shinil Electronics 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 Shinil Electronics will offset losses from the drop in Shinil Electronics' long position.Daehan Steel vs. PNC Technologies co | Daehan Steel vs. Handok Clean Tech | Daehan Steel vs. Polaris Office Corp | Daehan Steel vs. Orbitech 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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