Correlation Between Shinil Electronics and TK Chemical
Can any of the company-specific risk be diversified away by investing in both Shinil Electronics and TK Chemical 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 TK Chemical 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 TK Chemical, you can compare the effects of market volatilities on Shinil Electronics and TK Chemical 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 TK Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinil Electronics and TK Chemical.
Diversification Opportunities for Shinil Electronics and TK Chemical
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinil and 104480 is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Shinil Electronics Co and TK Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TK Chemical 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 TK Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TK Chemical has no effect on the direction of Shinil Electronics i.e., Shinil Electronics and TK Chemical go up and down completely randomly.
Pair Corralation between Shinil Electronics and TK Chemical
Assuming the 90 days trading horizon Shinil Electronics Co is expected to generate 0.78 times more return on investment than TK Chemical. However, Shinil Electronics Co is 1.28 times less risky than TK Chemical. It trades about 0.07 of its potential returns per unit of risk. TK Chemical is currently generating about -0.07 per unit of risk. If you would invest 142,900 in Shinil Electronics Co on September 3, 2024 and sell it today you would earn a total of 2,600 from holding Shinil Electronics Co or generate 1.82% 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. TK Chemical
Performance |
| Timeline |
| Shinil Electronics |
| TK Chemical |
Shinil Electronics and TK Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinil Electronics and TK Chemical
The main advantage of trading using opposite Shinil Electronics and TK Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinil Electronics position performs unexpectedly, TK Chemical 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 TK Chemical will offset losses from the drop in TK Chemical's long position.| Shinil Electronics vs. Korea Real Estate | Shinil Electronics vs. Busan Industrial Co | Shinil Electronics vs. UNISEM Co | Shinil Electronics vs. RPBio Inc |
| TK Chemical vs. Nice Information Telecommunication | TK Chemical vs. Tway Air Co | TK Chemical vs. Digital Power Communications | TK Chemical vs. Kisan Telecom 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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