Correlation Between DoubleU Games and Shinsegae Engineering

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

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

Diversification Opportunities for DoubleU Games and Shinsegae Engineering

0.0

Correlation Coefficient

DoubleU Games  Shinsegae Engineering

Pay attention - limited upside

The 3 months correlation between DoubleU and Shinsegae is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding DoubleU Games Co and Shinsegae Engineering Construc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Engineering and DoubleU Games 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 DoubleU Games Co 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 DoubleU Games i.e., DoubleU Games and Shinsegae Engineering go up and down completely randomly.

Pair Corralation between DoubleU Games and Shinsegae Engineering

Assuming the 90 days trading horizon DoubleU Games is expected to generate 2.17 times less return on investment than Shinsegae Engineering. But when comparing it to its historical volatility, DoubleU Games Co is 1.4 times less risky than Shinsegae Engineering. It trades about 0.01 of its potential returns per unit of risk. Shinsegae Engineering Construction is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,684,405  in Shinsegae Engineering Construction on October 10, 2024 and sell it today you would earn a total of  127,595  from holding Shinsegae Engineering Construction or generate 7.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

DoubleU Games Co  vs.  Shinsegae Engineering Construc

DoubleU Games

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DoubleU Games Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, DoubleU Games 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 DoubleU Games and Shinsegae Engineering

The main advantage of trading using opposite DoubleU Games and Shinsegae Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DoubleU Games 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 DoubleU Games Co 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.