Correlation Between Shinil Electronics and DAEDUCK ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both Shinil Electronics and DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS CoLtd, you can compare the effects of market volatilities on Shinil Electronics and DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinil Electronics and DAEDUCK ELECTRONICS.
Diversification Opportunities for Shinil Electronics and DAEDUCK ELECTRONICS
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shinil and DAEDUCK is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Shinil Electronics Co and DAEDUCK ELECTRONICS CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAEDUCK ELECTRONICS CoLtd 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 DAEDUCK ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAEDUCK ELECTRONICS CoLtd has no effect on the direction of Shinil Electronics i.e., Shinil Electronics and DAEDUCK ELECTRONICS go up and down completely randomly.
Pair Corralation between Shinil Electronics and DAEDUCK ELECTRONICS
Assuming the 90 days trading horizon Shinil Electronics is expected to generate 1.75 times less return on investment than DAEDUCK ELECTRONICS. But when comparing it to its historical volatility, Shinil Electronics Co is 1.24 times less risky than DAEDUCK ELECTRONICS. It trades about 0.05 of its potential returns per unit of risk. DAEDUCK ELECTRONICS CoLtd is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 805,000 in DAEDUCK ELECTRONICS CoLtd on August 31, 2024 and sell it today you would earn a total of 19,000 from holding DAEDUCK ELECTRONICS CoLtd or generate 2.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinil Electronics Co vs. DAEDUCK ELECTRONICS CoLtd
Performance |
| Timeline |
| Shinil Electronics |
| DAEDUCK ELECTRONICS CoLtd |
Shinil Electronics and DAEDUCK ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinil Electronics and DAEDUCK ELECTRONICS
The main advantage of trading using opposite Shinil Electronics and DAEDUCK ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinil Electronics position performs unexpectedly, DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS will offset losses from the drop in DAEDUCK ELECTRONICS'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 |
| DAEDUCK ELECTRONICS vs. SK IE Technology | DAEDUCK ELECTRONICS vs. Solus Advanced Materials | DAEDUCK ELECTRONICS vs. Iljin Display | DAEDUCK ELECTRONICS vs. Sungmoon Electronics 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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