Correlation Between Shinil Electronics and Korea Alcohol
Can any of the company-specific risk be diversified away by investing in both Shinil Electronics and Korea Alcohol 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 Korea Alcohol 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 Korea Alcohol Industrial, you can compare the effects of market volatilities on Shinil Electronics and Korea Alcohol 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 Korea Alcohol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinil Electronics and Korea Alcohol.
Diversification Opportunities for Shinil Electronics and Korea Alcohol
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinil and Korea is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Shinil Electronics Co and Korea Alcohol Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Alcohol Industrial 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 Korea Alcohol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Alcohol Industrial has no effect on the direction of Shinil Electronics i.e., Shinil Electronics and Korea Alcohol go up and down completely randomly.
Pair Corralation between Shinil Electronics and Korea Alcohol
Assuming the 90 days trading horizon Shinil Electronics Co is expected to under-perform the Korea Alcohol. But the stock apears to be less risky and, when comparing its historical volatility, Shinil Electronics Co is 1.86 times less risky than Korea Alcohol. The stock trades about -0.06 of its potential returns per unit of risk. The Korea Alcohol Industrial is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,072,265 in Korea Alcohol Industrial on October 31, 2024 and sell it today you would lose (212,265) from holding Korea Alcohol Industrial or give up 19.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinil Electronics Co vs. Korea Alcohol Industrial
Performance |
| Timeline |
| Shinil Electronics |
| Korea Alcohol Industrial |
Shinil Electronics and Korea Alcohol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinil Electronics and Korea Alcohol
The main advantage of trading using opposite Shinil Electronics and Korea Alcohol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinil Electronics position performs unexpectedly, Korea Alcohol 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 Korea Alcohol will offset losses from the drop in Korea Alcohol's long position.| Shinil Electronics vs. ISU Chemical Co | Shinil Electronics vs. Cuckoo Electronics Co | Shinil Electronics vs. GS Retail Co | Shinil Electronics vs. Wave Electronics Co |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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