Correlation Between Shinsegae and Korea Aerospace
Can any of the company-specific risk be diversified away by investing in both Shinsegae and Korea Aerospace 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 Korea Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinsegae and Korea Aerospace Industries, you can compare the effects of market volatilities on Shinsegae and Korea Aerospace 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 Korea Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae and Korea Aerospace.
Diversification Opportunities for Shinsegae and Korea Aerospace
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shinsegae and Korea is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae and Korea Aerospace Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Aerospace Indu 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 Korea Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Aerospace Indu has no effect on the direction of Shinsegae i.e., Shinsegae and Korea Aerospace go up and down completely randomly.
Pair Corralation between Shinsegae and Korea Aerospace
Assuming the 90 days trading horizon Shinsegae is expected to under-perform the Korea Aerospace. But the stock apears to be less risky and, when comparing its historical volatility, Shinsegae is 1.31 times less risky than Korea Aerospace. The stock trades about -0.03 of its potential returns per unit of risk. The Korea Aerospace Industries is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,988,676 in Korea Aerospace Industries on November 27, 2024 and sell it today you would earn a total of 1,001,324 from holding Korea Aerospace Industries or generate 20.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae vs. Korea Aerospace Industries
Performance |
| Timeline |
| Shinsegae |
| Korea Aerospace Indu |
Shinsegae and Korea Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae and Korea Aerospace
The main advantage of trading using opposite Shinsegae and Korea Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae position performs unexpectedly, Korea Aerospace 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 Korea Aerospace will offset losses from the drop in Korea Aerospace's long position.| Shinsegae vs. Songwon Industrial Co | Shinsegae vs. Daejung Chemicals Metals | Shinsegae vs. SK Chemicals Co | Shinsegae vs. Samhwa Paint Industrial |
| Korea Aerospace vs. LB Investment | Korea Aerospace vs. Nable Communications | Korea Aerospace vs. KT Submarine Telecom | Korea Aerospace vs. Nice Information Telecommunication |
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.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |