Correlation Between Shinil Industrial and Korea Alcohol
Can any of the company-specific risk be diversified away by investing in both Shinil Industrial and Korea Alcohol 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 Korea Alcohol 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 Korea Alcohol Industrial, you can compare the effects of market volatilities on Shinil Industrial and Korea Alcohol 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 Korea Alcohol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinil Industrial and Korea Alcohol.
Diversification Opportunities for Shinil Industrial and Korea Alcohol
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinil and Korea is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Shinil Industrial Co and Korea Alcohol Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Alcohol 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 Korea Alcohol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Alcohol Industrial has no effect on the direction of Shinil Industrial i.e., Shinil Industrial and Korea Alcohol go up and down completely randomly.
Pair Corralation between Shinil Industrial and Korea Alcohol
Assuming the 90 days trading horizon Shinil Industrial Co is expected to generate 0.63 times more return on investment than Korea Alcohol. However, Shinil Industrial Co is 1.58 times less risky than Korea Alcohol. It trades about -0.16 of its potential returns per unit of risk. Korea Alcohol Industrial is currently generating about -0.22 per unit of risk. If you would invest 142,400 in Shinil Industrial Co on November 7, 2024 and sell it today you would lose (2,000) from holding Shinil Industrial Co or give up 1.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Shinil Industrial Co vs. Korea Alcohol Industrial
Performance |
| Timeline |
| Shinil Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Korea Alcohol Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shinil Industrial and Korea Alcohol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinil Industrial and Korea Alcohol
The main advantage of trading using opposite Shinil Industrial and Korea Alcohol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinil Industrial position performs unexpectedly, Korea Alcohol 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 Korea Alcohol will offset losses from the drop in Korea Alcohol's long position.The idea behind Shinil Industrial Co and Korea Alcohol Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Korea Alcohol vs. SKONEC Entertainment Co | Korea Alcohol vs. Wonbang Tech Co | Korea Alcohol vs. SS TECH | Korea Alcohol vs. JYP Entertainment 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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