Correlation Between Shinil Electronics and Semyung Electric
Can any of the company-specific risk be diversified away by investing in both Shinil Electronics and Semyung Electric 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 Semyung Electric 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 Semyung Electric Machinery, you can compare the effects of market volatilities on Shinil Electronics and Semyung Electric 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 Semyung Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinil Electronics and Semyung Electric.
Diversification Opportunities for Shinil Electronics and Semyung Electric
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Shinil and Semyung is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Shinil Electronics Co and Semyung Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semyung Electric Mac 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 Semyung Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semyung Electric Mac has no effect on the direction of Shinil Electronics i.e., Shinil Electronics and Semyung Electric go up and down completely randomly.
Pair Corralation between Shinil Electronics and Semyung Electric
Assuming the 90 days trading horizon Shinil Electronics Co is expected to under-perform the Semyung Electric. But the stock apears to be less risky and, when comparing its historical volatility, Shinil Electronics Co is 3.43 times less risky than Semyung Electric. The stock trades about -0.06 of its potential returns per unit of risk. The Semyung Electric Machinery is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 308,344 in Semyung Electric Machinery on October 27, 2024 and sell it today you would earn a total of 326,656 from holding Semyung Electric Machinery or generate 105.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinil Electronics Co vs. Semyung Electric Machinery
Performance |
| Timeline |
| Shinil Electronics |
| Semyung Electric Mac |
Shinil Electronics and Semyung Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinil Electronics and Semyung Electric
The main advantage of trading using opposite Shinil Electronics and Semyung Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinil Electronics position performs unexpectedly, Semyung Electric 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 Semyung Electric will offset losses from the drop in Semyung Electric's long position.| Shinil Electronics vs. Samji Electronics Co | Shinil Electronics vs. LG Household Healthcare | Shinil Electronics vs. Dongbang Transport Logistics | Shinil Electronics vs. Daewoo Electronic Components |
| Semyung Electric vs. UJU Electronics Co | Semyung Electric vs. Vissem Electronics Co | Semyung Electric vs. Hannong Chemicals | Semyung Electric vs. DAEDUCK ELECTRONICS CoLtd |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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