Correlation Between Shinil Industrial and ABOV Semiconductor
Can any of the company-specific risk be diversified away by investing in both Shinil Industrial and ABOV Semiconductor 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 ABOV Semiconductor 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 ABOV Semiconductor Co, you can compare the effects of market volatilities on Shinil Industrial and ABOV Semiconductor 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 ABOV Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinil Industrial and ABOV Semiconductor.
Diversification Opportunities for Shinil Industrial and ABOV Semiconductor
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shinil and ABOV is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Shinil Industrial Co and ABOV Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABOV Semiconductor 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 ABOV Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABOV Semiconductor has no effect on the direction of Shinil Industrial i.e., Shinil Industrial and ABOV Semiconductor go up and down completely randomly.
Pair Corralation between Shinil Industrial and ABOV Semiconductor
Assuming the 90 days trading horizon Shinil Industrial is expected to generate 19.03 times less return on investment than ABOV Semiconductor. But when comparing it to its historical volatility, Shinil Industrial Co is 2.44 times less risky than ABOV Semiconductor. It trades about 0.02 of its potential returns per unit of risk. ABOV Semiconductor Co is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 791,000 in ABOV Semiconductor Co on October 15, 2024 and sell it today you would earn a total of 66,000 from holding ABOV Semiconductor Co or generate 8.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinil Industrial Co vs. ABOV Semiconductor Co
Performance |
| Timeline |
| Shinil Industrial |
| ABOV Semiconductor |
Shinil Industrial and ABOV Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinil Industrial and ABOV Semiconductor
The main advantage of trading using opposite Shinil Industrial and ABOV Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinil Industrial position performs unexpectedly, ABOV Semiconductor 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 ABOV Semiconductor will offset losses from the drop in ABOV Semiconductor's long position.| Shinil Industrial vs. Korean Air Lines | Shinil Industrial vs. Jeju Air Co | Shinil Industrial vs. Wireless Power Amplifier | Shinil Industrial vs. Tway Air Co |
| ABOV Semiconductor vs. Miwon Chemicals Co | ABOV Semiconductor vs. Kukdo Chemical Co | ABOV Semiconductor vs. Kyung In Synthetic Corp | ABOV Semiconductor vs. SK Chemicals 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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