Correlation Between Shinsegae and Doosan
Can any of the company-specific risk be diversified away by investing in both Shinsegae and Doosan 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 Shinsegae and Doosan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinsegae and Doosan, you can compare the effects of market volatilities on Shinsegae and Doosan 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 Shinsegae with a short position of Doosan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae and Doosan.
Diversification Opportunities for Shinsegae and Doosan
Pay attention - limited upside
The 3 months correlation between Shinsegae and Doosan is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae and Doosan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doosan and Shinsegae 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 Shinsegae are associated (or correlated) with Doosan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doosan has no effect on the direction of Shinsegae i.e., Shinsegae and Doosan go up and down completely randomly.
Pair Corralation between Shinsegae and Doosan
Assuming the 90 days trading horizon Shinsegae is expected to under-perform the Doosan. But the stock apears to be less risky and, when comparing its historical volatility, Shinsegae is 2.25 times less risky than Doosan. The stock trades about -0.28 of its potential returns per unit of risk. The Doosan is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 20,050,000 in Doosan on September 1, 2024 and sell it today you would lose (390,000) from holding Doosan or give up 1.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae vs. Doosan
Performance |
| Timeline |
| Shinsegae |
| Doosan |
Shinsegae and Doosan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae and Doosan
The main advantage of trading using opposite Shinsegae and Doosan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae position performs unexpectedly, Doosan 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 Doosan will offset losses from the drop in Doosan's long position.| Shinsegae vs. LG Display | Shinsegae vs. Hyundai Motor | Shinsegae vs. Hyundai Motor Co | Shinsegae vs. Hyundai Motor Co |
| Doosan vs. Shinsegae Engineering Construction | Doosan vs. Nam Hwa Construction | Doosan vs. Seoul Broadcasting System | Doosan vs. Dongbang Transport Logistics |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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