Correlation Between Hanil Iron and Shinsegae Engineering
Can any of the company-specific risk be diversified away by investing in both Hanil Iron 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 Hanil Iron and Shinsegae Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanil Iron Steel and Shinsegae Engineering Construction, you can compare the effects of market volatilities on Hanil Iron 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 Hanil Iron with a short position of Shinsegae Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanil Iron and Shinsegae Engineering.
Diversification Opportunities for Hanil Iron and Shinsegae Engineering
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hanil and Shinsegae is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Hanil Iron Steel and Shinsegae Engineering Construc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Engineering and Hanil Iron 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 Hanil Iron Steel 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 Hanil Iron i.e., Hanil Iron and Shinsegae Engineering go up and down completely randomly.
Pair Corralation between Hanil Iron and Shinsegae Engineering
Assuming the 90 days trading horizon Hanil Iron Steel is expected to under-perform the Shinsegae Engineering. In addition to that, Hanil Iron is 35.19 times more volatile than Shinsegae Engineering Construction. It trades about -0.02 of its total potential returns per unit of risk. Shinsegae Engineering Construction is currently generating about -0.28 per unit of volatility. If you would invest 1,811,000 in Shinsegae Engineering Construction on September 4, 2024 and sell it today you would lose (7,000) from holding Shinsegae Engineering Construction or give up 0.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanil Iron Steel vs. Shinsegae Engineering Construc
Performance |
| Timeline |
| Hanil Iron Steel |
| Shinsegae Engineering |
Hanil Iron and Shinsegae Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanil Iron and Shinsegae Engineering
The main advantage of trading using opposite Hanil Iron and Shinsegae Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanil Iron 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.| Hanil Iron vs. AptaBio Therapeutics | Hanil Iron vs. Daewoo SBI SPAC | Hanil Iron vs. Dream Security co | Hanil Iron vs. Microfriend |
| Shinsegae Engineering vs. AptaBio Therapeutics | Shinsegae Engineering vs. Daewoo SBI SPAC | Shinsegae Engineering vs. Dream Security co | Shinsegae Engineering vs. Microfriend |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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