Correlation Between Shinil Electronics and National Plastic
Can any of the company-specific risk be diversified away by investing in both Shinil Electronics and National Plastic 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 Shinil Electronics and National Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinil Electronics Co and National Plastic Co, you can compare the effects of market volatilities on Shinil Electronics and National Plastic 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 Shinil Electronics with a short position of National Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinil Electronics and National Plastic.
Diversification Opportunities for Shinil Electronics and National Plastic
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shinil and National is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Shinil Electronics Co and National Plastic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Plastic and Shinil Electronics 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 Shinil Electronics Co are associated (or correlated) with National Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Plastic has no effect on the direction of Shinil Electronics i.e., Shinil Electronics and National Plastic go up and down completely randomly.
Pair Corralation between Shinil Electronics and National Plastic
Assuming the 90 days trading horizon Shinil Electronics Co is expected to under-perform the National Plastic. But the stock apears to be less risky and, when comparing its historical volatility, Shinil Electronics Co is 1.15 times less risky than National Plastic. The stock trades about -0.01 of its potential returns per unit of risk. The National Plastic Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 260,000 in National Plastic Co on August 25, 2024 and sell it today you would lose (1,500) from holding National Plastic Co or give up 0.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinil Electronics Co vs. National Plastic Co
Performance |
| Timeline |
| Shinil Electronics |
| National Plastic |
Shinil Electronics and National Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinil Electronics and National Plastic
The main advantage of trading using opposite Shinil Electronics and National Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinil Electronics position performs unexpectedly, National Plastic 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 National Plastic will offset losses from the drop in National Plastic's long position.| Shinil Electronics vs. Busan Industrial Co | Shinil Electronics vs. Busan Ind | Shinil Electronics vs. Mirae Asset Daewoo | Shinil Electronics vs. UNISEM Co |
| National Plastic vs. Daejoo Electronic Materials | National Plastic vs. Shinil Electronics Co | National Plastic vs. Wireless Power Amplifier | National Plastic vs. Okins Electronics Co |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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