Correlation Between Shinil Electronics and Daesung Hi
Can any of the company-specific risk be diversified away by investing in both Shinil Electronics and Daesung Hi 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 Daesung Hi 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 Daesung Hi Tech Co, you can compare the effects of market volatilities on Shinil Electronics and Daesung Hi 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 Daesung Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinil Electronics and Daesung Hi.
Diversification Opportunities for Shinil Electronics and Daesung Hi
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinil and Daesung is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Shinil Electronics Co and Daesung Hi Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daesung Hi Tech 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 Daesung Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daesung Hi Tech has no effect on the direction of Shinil Electronics i.e., Shinil Electronics and Daesung Hi go up and down completely randomly.
Pair Corralation between Shinil Electronics and Daesung Hi
Assuming the 90 days trading horizon Shinil Electronics Co is expected to generate 0.35 times more return on investment than Daesung Hi. However, Shinil Electronics Co is 2.86 times less risky than Daesung Hi. It trades about -0.08 of its potential returns per unit of risk. Daesung Hi Tech Co is currently generating about -0.07 per unit of risk. If you would invest 183,916 in Shinil Electronics Co on September 1, 2024 and sell it today you would lose (38,416) from holding Shinil Electronics Co or give up 20.89% 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. Daesung Hi Tech Co
Performance |
| Timeline |
| Shinil Electronics |
| Daesung Hi Tech |
Shinil Electronics and Daesung Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinil Electronics and Daesung Hi
The main advantage of trading using opposite Shinil Electronics and Daesung Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinil Electronics position performs unexpectedly, Daesung Hi 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 Daesung Hi will offset losses from the drop in Daesung Hi's long position.| Shinil Electronics vs. LG Display | Shinil Electronics vs. Hyundai Motor | Shinil Electronics vs. Hyundai Motor Co | Shinil Electronics vs. Hyundai Motor Co |
| Daesung Hi vs. Samsung Electronics Co | Daesung Hi vs. Samsung Electronics Co | Daesung Hi vs. LG Energy Solution | Daesung Hi vs. SK Hynix |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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