Correlation Between Shinil Electronics and Daekyung Machinery
Can any of the company-specific risk be diversified away by investing in both Shinil Electronics and Daekyung Machinery 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 Daekyung Machinery 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 Daekyung Machinery Engineering, you can compare the effects of market volatilities on Shinil Electronics and Daekyung Machinery 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 Daekyung Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinil Electronics and Daekyung Machinery.
Diversification Opportunities for Shinil Electronics and Daekyung Machinery
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shinil and Daekyung is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Shinil Electronics Co and Daekyung Machinery Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daekyung Machinery 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 Daekyung Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daekyung Machinery has no effect on the direction of Shinil Electronics i.e., Shinil Electronics and Daekyung Machinery go up and down completely randomly.
Pair Corralation between Shinil Electronics and Daekyung Machinery
Assuming the 90 days trading horizon Shinil Electronics Co is expected to under-perform the Daekyung Machinery. But the stock apears to be less risky and, when comparing its historical volatility, Shinil Electronics Co is 3.72 times less risky than Daekyung Machinery. The stock trades about -0.04 of its potential returns per unit of risk. The Daekyung Machinery Engineering is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 35,700 in Daekyung Machinery Engineering on August 31, 2024 and sell it today you would earn a total of 15,800 from holding Daekyung Machinery Engineering or generate 44.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Shinil Electronics Co vs. Daekyung Machinery Engineering
Performance |
| Timeline |
| Shinil Electronics |
| Daekyung Machinery |
Shinil Electronics and Daekyung Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinil Electronics and Daekyung Machinery
The main advantage of trading using opposite Shinil Electronics and Daekyung Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinil Electronics position performs unexpectedly, Daekyung Machinery 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 Daekyung Machinery will offset losses from the drop in Daekyung Machinery's long position.| Shinil Electronics vs. LG Display | Shinil Electronics vs. Hyundai Motor | Shinil Electronics vs. Hyundai Motor Co | Shinil Electronics vs. Hyundai Motor Co |
| Daekyung Machinery vs. EBEST Investment Securities | Daekyung Machinery vs. Daechang Steel Co | Daekyung Machinery vs. Lindeman Asia Investment | Daekyung Machinery vs. BooKook Steel 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |