Correlation Between Samlip General and Shinsegae Food
Can any of the company-specific risk be diversified away by investing in both Samlip General and Shinsegae Food 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 Samlip General and Shinsegae Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samlip General Foods and Shinsegae Food, you can compare the effects of market volatilities on Samlip General and Shinsegae Food 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 Samlip General with a short position of Shinsegae Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samlip General and Shinsegae Food.
Diversification Opportunities for Samlip General and Shinsegae Food
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Samlip and Shinsegae is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Samlip General Foods and Shinsegae Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Food and Samlip General 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 Samlip General Foods are associated (or correlated) with Shinsegae Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Food has no effect on the direction of Samlip General i.e., Samlip General and Shinsegae Food go up and down completely randomly.
Pair Corralation between Samlip General and Shinsegae Food
Assuming the 90 days trading horizon Samlip General Foods is expected to under-perform the Shinsegae Food. In addition to that, Samlip General is 1.05 times more volatile than Shinsegae Food. It trades about -0.07 of its total potential returns per unit of risk. Shinsegae Food is currently generating about -0.05 per unit of volatility. If you would invest 3,774,411 in Shinsegae Food on August 25, 2024 and sell it today you would lose (494,411) from holding Shinsegae Food or give up 13.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samlip General Foods vs. Shinsegae Food
Performance |
| Timeline |
| Samlip General Foods |
| Shinsegae Food |
Samlip General and Shinsegae Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samlip General and Shinsegae Food
The main advantage of trading using opposite Samlip General and Shinsegae Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samlip General position performs unexpectedly, Shinsegae Food 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 Shinsegae Food will offset losses from the drop in Shinsegae Food's long position.| Samlip General vs. Dongwon Metal Co | Samlip General vs. ENERGYMACHINERY KOREA CoLtd | Samlip General vs. Dongsin Engineering Construction | Samlip General vs. Seohee Construction Co |
| Shinsegae Food vs. Busan Industrial Co | Shinsegae Food vs. Busan Ind | Shinsegae Food vs. Mirae Asset Daewoo | Shinsegae Food vs. UNISEM 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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