Correlation Between Shinil Electronics and Daejoo Electronic
Can any of the company-specific risk be diversified away by investing in both Shinil Electronics and Daejoo 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 Daejoo 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 Daejoo Electronic Materials, you can compare the effects of market volatilities on Shinil Electronics and Daejoo 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 Daejoo Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinil Electronics and Daejoo Electronic.
Diversification Opportunities for Shinil Electronics and Daejoo Electronic
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinil and Daejoo is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Shinil Electronics Co and Daejoo Electronic Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daejoo Electronic 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 Daejoo Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daejoo Electronic has no effect on the direction of Shinil Electronics i.e., Shinil Electronics and Daejoo Electronic go up and down completely randomly.
Pair Corralation between Shinil Electronics and Daejoo Electronic
Assuming the 90 days trading horizon Shinil Electronics Co is expected to under-perform the Daejoo Electronic. But the stock apears to be less risky and, when comparing its historical volatility, Shinil Electronics Co is 3.47 times less risky than Daejoo Electronic. The stock trades about -0.09 of its potential returns per unit of risk. The Daejoo Electronic Materials is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 8,390,000 in Daejoo Electronic Materials on August 25, 2024 and sell it today you would earn a total of 330,000 from holding Daejoo Electronic Materials or generate 3.93% 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. Daejoo Electronic Materials
Performance |
| Timeline |
| Shinil Electronics |
| Daejoo Electronic |
Shinil Electronics and Daejoo Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinil Electronics and Daejoo Electronic
The main advantage of trading using opposite Shinil Electronics and Daejoo Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinil Electronics position performs unexpectedly, Daejoo 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 Daejoo Electronic will offset losses from the drop in Daejoo Electronic'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 |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |