Correlation Between Shinsegae and PJ Electronics
Can any of the company-specific risk be diversified away by investing in both Shinsegae and PJ Electronics 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 PJ Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinsegae and PJ Electronics Co, you can compare the effects of market volatilities on Shinsegae and PJ Electronics 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 PJ Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae and PJ Electronics.
Diversification Opportunities for Shinsegae and PJ Electronics
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shinsegae and 006140 is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae and PJ Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJ Electronics 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 PJ Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PJ Electronics has no effect on the direction of Shinsegae i.e., Shinsegae and PJ Electronics go up and down completely randomly.
Pair Corralation between Shinsegae and PJ Electronics
Assuming the 90 days trading horizon Shinsegae is expected to generate 0.78 times more return on investment than PJ Electronics. However, Shinsegae is 1.28 times less risky than PJ Electronics. It trades about 0.02 of its potential returns per unit of risk. PJ Electronics Co is currently generating about -0.16 per unit of risk. If you would invest 13,350,000 in Shinsegae on September 13, 2024 and sell it today you would earn a total of 60,000 from holding Shinsegae or generate 0.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shinsegae vs. PJ Electronics Co
Performance |
| Timeline |
| Shinsegae |
| PJ Electronics |
Shinsegae and PJ Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae and PJ Electronics
The main advantage of trading using opposite Shinsegae and PJ Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae position performs unexpectedly, PJ Electronics 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 PJ Electronics will offset losses from the drop in PJ Electronics' long position.| Shinsegae vs. CU Tech Corp | Shinsegae vs. Spolytech Co | Shinsegae vs. Daesung Hi Tech Co | Shinsegae vs. Automobile Pc |
| PJ Electronics vs. Daejoo Electronic Materials | PJ Electronics vs. Interflex Co | PJ Electronics vs. Solution Advanced Technology | PJ Electronics vs. Busan Industrial 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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