Correlation Between Dongbang Transport and Shinsegae Information
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport and Shinsegae Information 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 Dongbang Transport and Shinsegae Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongbang Transport Logistics and Shinsegae Information Communication, you can compare the effects of market volatilities on Dongbang Transport and Shinsegae Information 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 Dongbang Transport with a short position of Shinsegae Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and Shinsegae Information.
Diversification Opportunities for Dongbang Transport and Shinsegae Information
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dongbang and Shinsegae is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and Shinsegae Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Information and Dongbang Transport 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 Dongbang Transport Logistics are associated (or correlated) with Shinsegae Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Information has no effect on the direction of Dongbang Transport i.e., Dongbang Transport and Shinsegae Information go up and down completely randomly.
Pair Corralation between Dongbang Transport and Shinsegae Information
Assuming the 90 days trading horizon Dongbang Transport Logistics is expected to generate 1.72 times more return on investment than Shinsegae Information. However, Dongbang Transport is 1.72 times more volatile than Shinsegae Information Communication. It trades about -0.12 of its potential returns per unit of risk. Shinsegae Information Communication is currently generating about -0.23 per unit of risk. If you would invest 225,000 in Dongbang Transport Logistics on September 12, 2024 and sell it today you would lose (21,000) from holding Dongbang Transport Logistics or give up 9.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Transport Logistics vs. Shinsegae Information Communic
Performance |
| Timeline |
| Dongbang Transport |
| Shinsegae Information |
Dongbang Transport and Shinsegae Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Transport and Shinsegae Information
The main advantage of trading using opposite Dongbang Transport and Shinsegae Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport position performs unexpectedly, Shinsegae Information 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 Shinsegae Information will offset losses from the drop in Shinsegae Information's long position.| Dongbang Transport vs. Samsung Electronics Co | Dongbang Transport vs. Samsung Electronics Co | Dongbang Transport vs. SK Hynix | Dongbang Transport vs. POSCO Holdings |
| Shinsegae Information vs. Samsung Electronics Co | Shinsegae Information vs. Samsung Electronics Co | Shinsegae Information vs. SK Hynix | Shinsegae Information vs. POSCO Holdings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |