Correlation Between Shinsegae and Konan Technology
Can any of the company-specific risk be diversified away by investing in both Shinsegae and Konan Technology 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 Konan Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinsegae and Konan Technology, you can compare the effects of market volatilities on Shinsegae and Konan Technology 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 Konan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae and Konan Technology.
Diversification Opportunities for Shinsegae and Konan Technology
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shinsegae and Konan is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae and Konan Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konan Technology 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 Konan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konan Technology has no effect on the direction of Shinsegae i.e., Shinsegae and Konan Technology go up and down completely randomly.
Pair Corralation between Shinsegae and Konan Technology
Assuming the 90 days trading horizon Shinsegae is expected to under-perform the Konan Technology. But the stock apears to be less risky and, when comparing its historical volatility, Shinsegae is 2.41 times less risky than Konan Technology. The stock trades about -0.09 of its potential returns per unit of risk. The Konan Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,235,000 in Konan Technology on September 3, 2024 and sell it today you would earn a total of 275,000 from holding Konan Technology or generate 12.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae vs. Konan Technology
Performance |
| Timeline |
| Shinsegae |
| Konan Technology |
Shinsegae and Konan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae and Konan Technology
The main advantage of trading using opposite Shinsegae and Konan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae position performs unexpectedly, Konan Technology 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 Konan Technology will offset losses from the drop in Konan Technology's long position.| Shinsegae vs. Korea Real Estate | Shinsegae vs. Busan Industrial Co | Shinsegae vs. UNISEM Co | Shinsegae vs. RPBio Inc |
| Konan Technology vs. Posco ICT | Konan Technology vs. Devsisters corporation | Konan Technology vs. Alchera | Konan Technology 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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