Correlation Between Shinil Electronics and Asia Technology
Can any of the company-specific risk be diversified away by investing in both Shinil Electronics and Asia Technology 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 Asia Technology 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 Asia Technology Co, you can compare the effects of market volatilities on Shinil Electronics and Asia Technology 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 Asia Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinil Electronics and Asia Technology.
Diversification Opportunities for Shinil Electronics and Asia Technology
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Shinil and Asia is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Shinil Electronics Co and Asia Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Technology 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 Asia Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Technology has no effect on the direction of Shinil Electronics i.e., Shinil Electronics and Asia Technology go up and down completely randomly.
Pair Corralation between Shinil Electronics and Asia Technology
Assuming the 90 days trading horizon Shinil Electronics Co is expected to generate 0.58 times more return on investment than Asia Technology. However, Shinil Electronics Co is 1.72 times less risky than Asia Technology. It trades about 0.06 of its potential returns per unit of risk. Asia Technology Co is currently generating about 0.01 per unit of risk. If you would invest 144,000 in Shinil Electronics Co on August 28, 2024 and sell it today you would earn a total of 2,000 from holding Shinil Electronics Co or generate 1.39% 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. Asia Technology Co
Performance |
| Timeline |
| Shinil Electronics |
| Asia Technology |
Shinil Electronics and Asia Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinil Electronics and Asia Technology
The main advantage of trading using opposite Shinil Electronics and Asia Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinil Electronics position performs unexpectedly, Asia Technology 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 Asia Technology will offset losses from the drop in Asia Technology's long position.| Shinil Electronics vs. Busan Industrial Co | Shinil Electronics vs. Busan Ind | Shinil Electronics vs. Mirae Asset Daewoo | Shinil Electronics vs. UNISEM Co |
| Asia Technology vs. Lotte Data Communication | Asia Technology vs. Eugene Technology CoLtd | Asia Technology vs. Daishin Information Communications | Asia Technology vs. Guyoung Technology 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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