Correlation Between Shinil Electronics and Choil Aluminum
Can any of the company-specific risk be diversified away by investing in both Shinil Electronics and Choil Aluminum 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 Choil Aluminum 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 Choil Aluminum, you can compare the effects of market volatilities on Shinil Electronics and Choil Aluminum 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 Choil Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinil Electronics and Choil Aluminum.
Diversification Opportunities for Shinil Electronics and Choil Aluminum
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinil and Choil is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Shinil Electronics Co and Choil Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choil Aluminum 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 Choil Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choil Aluminum has no effect on the direction of Shinil Electronics i.e., Shinil Electronics and Choil Aluminum go up and down completely randomly.
Pair Corralation between Shinil Electronics and Choil Aluminum
Assuming the 90 days trading horizon Shinil Electronics Co is expected to under-perform the Choil Aluminum. But the stock apears to be less risky and, when comparing its historical volatility, Shinil Electronics Co is 1.97 times less risky than Choil Aluminum. The stock trades about -0.02 of its potential returns per unit of risk. The Choil Aluminum is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 139,500 in Choil Aluminum on October 30, 2024 and sell it today you would earn a total of 10,300 from holding Choil Aluminum or generate 7.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinil Electronics Co vs. Choil Aluminum
Performance |
| Timeline |
| Shinil Electronics |
| Choil Aluminum |
Shinil Electronics and Choil Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinil Electronics and Choil Aluminum
The main advantage of trading using opposite Shinil Electronics and Choil Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinil Electronics position performs unexpectedly, Choil Aluminum 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 Choil Aluminum will offset losses from the drop in Choil Aluminum's long position.| Shinil Electronics vs. Daewon Chemical Co | Shinil Electronics vs. LG Household Healthcare | Shinil Electronics vs. Sung Bo Chemicals | Shinil Electronics vs. Daejung Chemicals Metals |
| Choil Aluminum vs. Hotel Shilla Co | Choil Aluminum vs. Lotte Data Communication | Choil Aluminum vs. NICE Information Service | Choil Aluminum vs. Insung Information 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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