Correlation Between Aprogen Healthcare and Shinsegae Engineering

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

By analyzing existing cross correlation between Aprogen Healthcare Games and Shinsegae Engineering Construction, you can compare the effects of market volatilities on Aprogen Healthcare and Shinsegae Engineering 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 Aprogen Healthcare with a short position of Shinsegae Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aprogen Healthcare and Shinsegae Engineering.

Diversification Opportunities for Aprogen Healthcare and Shinsegae Engineering

0.52

Correlation Coefficient

Aprogen Healthcare  Shinsegae Engineering

Very weak diversification

The 3 months correlation between Aprogen and Shinsegae is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Aprogen Healthcare Games and Shinsegae Engineering Construc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Engineering and Aprogen Healthcare 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 Aprogen Healthcare Games are associated (or correlated) with Shinsegae Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Engineering has no effect on the direction of Aprogen Healthcare i.e., Aprogen Healthcare and Shinsegae Engineering go up and down completely randomly.

Pair Corralation between Aprogen Healthcare and Shinsegae Engineering

Assuming the 90 days trading horizon Aprogen Healthcare Games is expected to under-perform the Shinsegae Engineering. In addition to that, Aprogen Healthcare is 46.77 times more volatile than Shinsegae Engineering Construction. It trades about -0.01 of its total potential returns per unit of risk. Shinsegae Engineering Construction is currently generating about -0.04 per unit of volatility. If you would invest  1,817,000  in Shinsegae Engineering Construction on October 10, 2024 and sell it today you would lose (5,000) from holding Shinsegae Engineering Construction or give up 0.28% of portfolio value over 90 days.

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

Aprogen Healthcare Games  vs.  Shinsegae Engineering Construc

Aprogen Healthcare Games

Risk-Adjusted Performance

0 of 100

Very Weak

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

Shinsegae Engineering

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Aprogen Healthcare and Shinsegae Engineering

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

The idea behind Aprogen Healthcare Games and Shinsegae Engineering Construction 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..