Correlation Between Shinil Electronics and Korea Electronic
Can any of the company-specific risk be diversified away by investing in both Shinil Electronics and Korea Electronic 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 Electronic 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 Electronic Certification, you can compare the effects of market volatilities on Shinil Electronics and Korea Electronic 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 Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinil Electronics and Korea Electronic.
Diversification Opportunities for Shinil Electronics and Korea Electronic
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shinil and Korea is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Shinil Electronics Co and Korea Electronic Certification in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Electronic Cer 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 Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Electronic Cer has no effect on the direction of Shinil Electronics i.e., Shinil Electronics and Korea Electronic go up and down completely randomly.
Pair Corralation between Shinil Electronics and Korea Electronic
Assuming the 90 days trading horizon Shinil Electronics Co is expected to generate 0.49 times more return on investment than Korea Electronic. However, Shinil Electronics Co is 2.05 times less risky than Korea Electronic. It trades about -0.04 of its potential returns per unit of risk. Korea Electronic Certification is currently generating about -0.03 per unit of risk. If you would invest 189,927 in Shinil Electronics Co on September 2, 2024 and sell it today you would lose (44,427) from holding Shinil Electronics Co or give up 23.39% 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. Korea Electronic Certification
Performance |
| Timeline |
| Shinil Electronics |
| Korea Electronic Cer |
Shinil Electronics and Korea Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinil Electronics and Korea Electronic
The main advantage of trading using opposite Shinil Electronics and Korea Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinil Electronics position performs unexpectedly, Korea Electronic 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 Electronic will offset losses from the drop in Korea Electronic's long position.| Shinil Electronics vs. LG Display | Shinil Electronics vs. Hyundai Motor Co | Shinil Electronics vs. Hyundai Motor Co | Shinil Electronics vs. Adaptive Plasma Technology |
| Korea Electronic vs. Korea New Network | Korea Electronic vs. ICD Co | Korea Electronic vs. DYPNF CoLtd | Korea Electronic vs. Busan Industrial 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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