Correlation Between Shinil Electronics and SEOJEON ELECTRIC
Can any of the company-specific risk be diversified away by investing in both Shinil Electronics and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC 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 SEOJEON ELECTRIC MACHINERY, you can compare the effects of market volatilities on Shinil Electronics and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinil Electronics and SEOJEON ELECTRIC.
Diversification Opportunities for Shinil Electronics and SEOJEON ELECTRIC
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinil and SEOJEON is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Shinil Electronics Co and SEOJEON ELECTRIC MACHINERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEOJEON ELECTRIC MAC 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 SEOJEON ELECTRIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEOJEON ELECTRIC MAC has no effect on the direction of Shinil Electronics i.e., Shinil Electronics and SEOJEON ELECTRIC go up and down completely randomly.
Pair Corralation between Shinil Electronics and SEOJEON ELECTRIC
Assuming the 90 days trading horizon Shinil Electronics is expected to generate 6.25 times less return on investment than SEOJEON ELECTRIC. But when comparing it to its historical volatility, Shinil Electronics Co is 1.93 times less risky than SEOJEON ELECTRIC. It trades about 0.06 of its potential returns per unit of risk. SEOJEON ELECTRIC MACHINERY is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 380,000 in SEOJEON ELECTRIC MACHINERY on October 14, 2024 and sell it today you would earn a total of 31,000 from holding SEOJEON ELECTRIC MACHINERY or generate 8.16% 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. SEOJEON ELECTRIC MACHINERY
Performance |
| Timeline |
| Shinil Electronics |
| SEOJEON ELECTRIC MAC |
Shinil Electronics and SEOJEON ELECTRIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinil Electronics and SEOJEON ELECTRIC
The main advantage of trading using opposite Shinil Electronics and SEOJEON ELECTRIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinil Electronics position performs unexpectedly, SEOJEON ELECTRIC 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 SEOJEON ELECTRIC will offset losses from the drop in SEOJEON ELECTRIC's long position.| Shinil Electronics vs. Samji Electronics Co | Shinil Electronics vs. ABCO Electronics Co | Shinil Electronics vs. Lotte Rental Co | Shinil Electronics vs. SungMoon Electronics Co |
| SEOJEON ELECTRIC vs. Sungchang Autotech Co | SEOJEON ELECTRIC vs. Techwing | SEOJEON ELECTRIC vs. A Tech Solution Co | SEOJEON ELECTRIC vs. Narae Nanotech Corp |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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