Correlation Between SH Energy and ASTORY CoLtd
Can any of the company-specific risk be diversified away by investing in both SH Energy and ASTORY CoLtd 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 SH Energy and ASTORY CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SH Energy Chemical and ASTORY CoLtd, you can compare the effects of market volatilities on SH Energy and ASTORY CoLtd 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 SH Energy with a short position of ASTORY CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of SH Energy and ASTORY CoLtd.
Diversification Opportunities for SH Energy and ASTORY CoLtd
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 002360 and ASTORY is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding SH Energy Chemical and ASTORY CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASTORY CoLtd and SH Energy 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 SH Energy Chemical are associated (or correlated) with ASTORY CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASTORY CoLtd has no effect on the direction of SH Energy i.e., SH Energy and ASTORY CoLtd go up and down completely randomly.
Pair Corralation between SH Energy and ASTORY CoLtd
Assuming the 90 days trading horizon SH Energy Chemical is expected to generate 1.15 times more return on investment than ASTORY CoLtd. However, SH Energy is 1.15 times more volatile than ASTORY CoLtd. It trades about -0.02 of its potential returns per unit of risk. ASTORY CoLtd is currently generating about -0.09 per unit of risk. If you would invest 64,767 in SH Energy Chemical on September 4, 2024 and sell it today you would lose (12,567) from holding SH Energy Chemical or give up 19.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SH Energy Chemical vs. ASTORY CoLtd
Performance |
| Timeline |
| SH Energy Chemical |
| ASTORY CoLtd |
SH Energy and ASTORY CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SH Energy and ASTORY CoLtd
The main advantage of trading using opposite SH Energy and ASTORY CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SH Energy position performs unexpectedly, ASTORY CoLtd 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 ASTORY CoLtd will offset losses from the drop in ASTORY CoLtd's long position.| SH Energy vs. Samyung Trading Co | SH Energy vs. Shinsegae Information Communication | SH Energy vs. System and Application | SH Energy vs. TS Investment Corp |
| ASTORY CoLtd vs. BNK Financial Group | ASTORY CoLtd vs. Daehan Synthetic Fiber | ASTORY CoLtd vs. SH Energy Chemical | ASTORY CoLtd vs. Miwon Chemical |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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