Correlation Between Shinil Industrial and Shin Steel
Can any of the company-specific risk be diversified away by investing in both Shinil Industrial and Shin Steel 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 Shin Steel 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 Shin Steel Co, you can compare the effects of market volatilities on Shinil Industrial and Shin Steel 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 Shin Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinil Industrial and Shin Steel.
Diversification Opportunities for Shinil Industrial and Shin Steel
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shinil and Shin is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Shinil Industrial Co and Shin Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Steel 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 Shin Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Steel has no effect on the direction of Shinil Industrial i.e., Shinil Industrial and Shin Steel go up and down completely randomly.
Pair Corralation between Shinil Industrial and Shin Steel
Assuming the 90 days trading horizon Shinil Industrial Co is expected to generate 0.45 times more return on investment than Shin Steel. However, Shinil Industrial Co is 2.24 times less risky than Shin Steel. It trades about -0.07 of its potential returns per unit of risk. Shin Steel Co is currently generating about -0.05 per unit of risk. If you would invest 163,381 in Shinil Industrial Co on October 18, 2024 and sell it today you would lose (20,281) from holding Shinil Industrial Co or give up 12.41% 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. Shin Steel Co
Performance |
| Timeline |
| Shinil Industrial |
| Shin Steel |
Shinil Industrial and Shin Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinil Industrial and Shin Steel
The main advantage of trading using opposite Shinil Industrial and Shin Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinil Industrial position performs unexpectedly, Shin Steel 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 Shin Steel will offset losses from the drop in Shin Steel's long position.| Shinil Industrial vs. Hyundai Engineering Construction | Shinil Industrial vs. DoubleU Games Co | Shinil Industrial vs. Korea Air Svc | Shinil Industrial vs. Nam Hwa Construction |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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