Correlation Between Shinil Electronics and Shinsegae Information
Can any of the company-specific risk be diversified away by investing in both Shinil Electronics and Shinsegae Information 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 Shinsegae Information 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 Shinsegae Information Communication, you can compare the effects of market volatilities on Shinil Electronics and Shinsegae Information 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 Shinsegae Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinil Electronics and Shinsegae Information.
Diversification Opportunities for Shinil Electronics and Shinsegae Information
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shinil and Shinsegae is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Shinil Electronics Co and Shinsegae Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Information 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 Shinsegae Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Information has no effect on the direction of Shinil Electronics i.e., Shinil Electronics and Shinsegae Information go up and down completely randomly.
Pair Corralation between Shinil Electronics and Shinsegae Information
Assuming the 90 days trading horizon Shinil Electronics Co is expected to generate 0.74 times more return on investment than Shinsegae Information. However, Shinil Electronics Co is 1.36 times less risky than Shinsegae Information. It trades about -0.07 of its potential returns per unit of risk. Shinsegae Information Communication is currently generating about -0.08 per unit of risk. If you would invest 206,831 in Shinil Electronics Co on August 24, 2024 and sell it today you would lose (60,631) from holding Shinil Electronics Co or give up 29.31% 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. Shinsegae Information Communic
Performance |
| Timeline |
| Shinil Electronics |
| Shinsegae Information |
Shinil Electronics and Shinsegae Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinil Electronics and Shinsegae Information
The main advantage of trading using opposite Shinil Electronics and Shinsegae Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinil Electronics position performs unexpectedly, Shinsegae Information 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 Shinsegae Information will offset losses from the drop in Shinsegae Information's long position.| Shinil Electronics vs. Sangsin Energy Display | Shinil Electronics vs. Hana Financial | Shinil Electronics vs. Shinhan Financial Group | Shinil Electronics vs. Digital Power Communications |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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