Correlation Between Shinil Electronics and Hyundai Engineering
Can any of the company-specific risk be diversified away by investing in both Shinil Electronics and Hyundai Engineering 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 Hyundai Engineering 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 Hyundai Engineering Plastics, you can compare the effects of market volatilities on Shinil Electronics and Hyundai Engineering 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 Hyundai Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinil Electronics and Hyundai Engineering.
Diversification Opportunities for Shinil Electronics and Hyundai Engineering
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinil and Hyundai is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Shinil Electronics Co and Hyundai Engineering Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Engineering 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 Hyundai Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Engineering has no effect on the direction of Shinil Electronics i.e., Shinil Electronics and Hyundai Engineering go up and down completely randomly.
Pair Corralation between Shinil Electronics and Hyundai Engineering
Assuming the 90 days trading horizon Shinil Electronics Co is expected to generate 0.56 times more return on investment than Hyundai Engineering. However, Shinil Electronics Co is 1.8 times less risky than Hyundai Engineering. It trades about -0.02 of its potential returns per unit of risk. Hyundai Engineering Plastics is currently generating about -0.08 per unit of risk. If you would invest 141,000 in Shinil Electronics Co on October 30, 2024 and sell it today you would lose (300.00) from holding Shinil Electronics Co or give up 0.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinil Electronics Co vs. Hyundai Engineering Plastics
Performance |
| Timeline |
| Shinil Electronics |
| Hyundai Engineering |
Shinil Electronics and Hyundai Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinil Electronics and Hyundai Engineering
The main advantage of trading using opposite Shinil Electronics and Hyundai Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinil Electronics position performs unexpectedly, Hyundai Engineering 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 Hyundai Engineering will offset losses from the drop in Hyundai Engineering'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 |
| Hyundai Engineering vs. Kakao Games Corp | Hyundai Engineering vs. SEOJEON ELECTRIC MACHINERY | Hyundai Engineering vs. Hanshin Construction Co | Hyundai Engineering vs. Dongwoo Farm To |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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