Correlation Between Shinil Electronics and Hugel
Can any of the company-specific risk be diversified away by investing in both Shinil Electronics and Hugel 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 Hugel 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 Hugel Inc, you can compare the effects of market volatilities on Shinil Electronics and Hugel 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 Hugel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinil Electronics and Hugel.
Diversification Opportunities for Shinil Electronics and Hugel
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinil and Hugel is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Shinil Electronics Co and Hugel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hugel Inc 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 Hugel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hugel Inc has no effect on the direction of Shinil Electronics i.e., Shinil Electronics and Hugel go up and down completely randomly.
Pair Corralation between Shinil Electronics and Hugel
Assuming the 90 days trading horizon Shinil Electronics is expected to generate 10.64 times less return on investment than Hugel. But when comparing it to its historical volatility, Shinil Electronics Co is 3.22 times less risky than Hugel. It trades about 0.07 of its potential returns per unit of risk. Hugel Inc is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 24,700,000 in Hugel Inc on November 22, 2024 and sell it today you would earn a total of 3,750,000 from holding Hugel Inc or generate 15.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Shinil Electronics Co vs. Hugel Inc
Performance |
| Timeline |
| Shinil Electronics |
| Hugel Inc |
Shinil Electronics and Hugel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinil Electronics and Hugel
The main advantage of trading using opposite Shinil Electronics and Hugel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinil Electronics position performs unexpectedly, Hugel 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 Hugel will offset losses from the drop in Hugel's long position.| Shinil Electronics vs. Ssangyong Information Communication | Shinil Electronics vs. LS Materials | Shinil Electronics vs. Insung Information Co | Shinil Electronics vs. Hyosung Advanced Materials |
| Hugel vs. Korea Computer | Hugel vs. Hankook Furniture Co | Hugel vs. YeaRimDang Publishing Co | Hugel vs. Visang Education |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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