Correlation Between Shinsegae and Dongkuk Structures
Can any of the company-specific risk be diversified away by investing in both Shinsegae and Dongkuk Structures 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 Dongkuk Structures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinsegae and Dongkuk Structures Construction, you can compare the effects of market volatilities on Shinsegae and Dongkuk Structures 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 Dongkuk Structures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae and Dongkuk Structures.
Diversification Opportunities for Shinsegae and Dongkuk Structures
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shinsegae and Dongkuk is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae and Dongkuk Structures Constructio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongkuk Structures 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 Dongkuk Structures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongkuk Structures has no effect on the direction of Shinsegae i.e., Shinsegae and Dongkuk Structures go up and down completely randomly.
Pair Corralation between Shinsegae and Dongkuk Structures
Assuming the 90 days trading horizon Shinsegae is expected to generate 0.82 times more return on investment than Dongkuk Structures. However, Shinsegae is 1.22 times less risky than Dongkuk Structures. It trades about -0.24 of its potential returns per unit of risk. Dongkuk Structures Construction is currently generating about -0.24 per unit of risk. If you would invest 15,910,000 in Shinsegae on August 29, 2024 and sell it today you would lose (2,680,000) from holding Shinsegae or give up 16.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae vs. Dongkuk Structures Constructio
Performance |
| Timeline |
| Shinsegae |
| Dongkuk Structures |
Shinsegae and Dongkuk Structures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae and Dongkuk Structures
The main advantage of trading using opposite Shinsegae and Dongkuk Structures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae position performs unexpectedly, Dongkuk Structures 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 Dongkuk Structures will offset losses from the drop in Dongkuk Structures' long position.| Shinsegae vs. KMH Hitech Co | Shinsegae vs. GemVaxKAEL CoLtd | Shinsegae vs. Busan Industrial Co | Shinsegae vs. Busan Ind |
| Dongkuk Structures vs. Samsung Electronics Co | Dongkuk Structures vs. Samsung Electronics Co | Dongkuk Structures vs. KB Financial Group | Dongkuk Structures vs. Shinhan Financial Group |
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.
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