Correlation Between Shinsegae and Daou Data
Can any of the company-specific risk be diversified away by investing in both Shinsegae and Daou Data 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 Daou Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinsegae and Daou Data Corp, you can compare the effects of market volatilities on Shinsegae and Daou Data 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 Daou Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae and Daou Data.
Diversification Opportunities for Shinsegae and Daou Data
Very weak diversification
The 3 months correlation between Shinsegae and Daou is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae and Daou Data Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daou Data Corp 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 Daou Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daou Data Corp has no effect on the direction of Shinsegae i.e., Shinsegae and Daou Data go up and down completely randomly.
Pair Corralation between Shinsegae and Daou Data
Assuming the 90 days trading horizon Shinsegae is expected to generate 0.56 times more return on investment than Daou Data. However, Shinsegae is 1.78 times less risky than Daou Data. It trades about -0.04 of its potential returns per unit of risk. Daou Data Corp is currently generating about -0.05 per unit of risk. If you would invest 20,785,300 in Shinsegae on September 14, 2024 and sell it today you would lose (7,295,300) from holding Shinsegae or give up 35.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Shinsegae vs. Daou Data Corp
Performance |
| Timeline |
| Shinsegae |
| Daou Data Corp |
Shinsegae and Daou Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae and Daou Data
The main advantage of trading using opposite Shinsegae and Daou Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae position performs unexpectedly, Daou Data 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 Daou Data will offset losses from the drop in Daou Data's long position.| Shinsegae vs. Daou Data Corp | Shinsegae vs. Solution Advanced Technology | Shinsegae vs. Busan Industrial Co | Shinsegae vs. Busan Ind |
| Daou Data vs. Dongjin Semichem Co | Daou Data vs. AhnLab Inc | Daou Data vs. Posco ICT | Daou Data vs. CJ ENM |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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