Correlation Between Shinil Industrial and Seoul Food
Can any of the company-specific risk be diversified away by investing in both Shinil Industrial and Seoul Food 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 Industrial and Seoul Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinil Industrial Co and Seoul Food Industrial, you can compare the effects of market volatilities on Shinil Industrial and Seoul Food 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 Industrial with a short position of Seoul Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinil Industrial and Seoul Food.
Diversification Opportunities for Shinil Industrial and Seoul Food
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shinil and Seoul is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Shinil Industrial Co and Seoul Food Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Food Industrial and Shinil Industrial 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 Industrial Co are associated (or correlated) with Seoul Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Food Industrial has no effect on the direction of Shinil Industrial i.e., Shinil Industrial and Seoul Food go up and down completely randomly.
Pair Corralation between Shinil Industrial and Seoul Food
Assuming the 90 days trading horizon Shinil Industrial Co is expected to generate 0.99 times more return on investment than Seoul Food. However, Shinil Industrial Co is 1.01 times less risky than Seoul Food. It trades about -0.03 of its potential returns per unit of risk. Seoul Food Industrial is currently generating about -0.07 per unit of risk. If you would invest 148,241 in Shinil Industrial Co on October 12, 2024 and sell it today you would lose (5,541) from holding Shinil Industrial Co or give up 3.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinil Industrial Co vs. Seoul Food Industrial
Performance |
| Timeline |
| Shinil Industrial |
| Seoul Food Industrial |
Shinil Industrial and Seoul Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinil Industrial and Seoul Food
The main advantage of trading using opposite Shinil Industrial and Seoul Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinil Industrial position performs unexpectedly, Seoul Food 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 Seoul Food will offset losses from the drop in Seoul Food's long position.| Shinil Industrial vs. Samsung Electronics Co | Shinil Industrial vs. Samsung Electronics Co | Shinil Industrial vs. LG Energy Solution | Shinil Industrial vs. SK Hynix |
| Seoul Food vs. Shinil Industrial Co | Seoul Food vs. Industrial Bank | Seoul Food vs. Songwon Industrial Co | Seoul Food vs. Formetal 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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