Correlation Between FOODWELL and Shinil Electronics
Can any of the company-specific risk be diversified away by investing in both FOODWELL and Shinil Electronics 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 FOODWELL and Shinil Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FOODWELL Co and Shinil Electronics Co, you can compare the effects of market volatilities on FOODWELL and Shinil Electronics 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 FOODWELL with a short position of Shinil Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of FOODWELL and Shinil Electronics.
Diversification Opportunities for FOODWELL and Shinil Electronics
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FOODWELL and Shinil is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding FOODWELL Co and Shinil Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinil Electronics and FOODWELL 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 FOODWELL Co are associated (or correlated) with Shinil Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinil Electronics has no effect on the direction of FOODWELL i.e., FOODWELL and Shinil Electronics go up and down completely randomly.
Pair Corralation between FOODWELL and Shinil Electronics
Assuming the 90 days trading horizon FOODWELL Co is expected to under-perform the Shinil Electronics. In addition to that, FOODWELL is 1.95 times more volatile than Shinil Electronics Co. It trades about -0.07 of its total potential returns per unit of risk. Shinil Electronics Co is currently generating about -0.11 per unit of volatility. If you would invest 142,400 in Shinil Electronics Co on November 7, 2024 and sell it today you would lose (2,600) from holding Shinil Electronics Co or give up 1.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FOODWELL Co vs. Shinil Electronics Co
Performance |
| Timeline |
| FOODWELL |
| Shinil Electronics |
FOODWELL and Shinil Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FOODWELL and Shinil Electronics
The main advantage of trading using opposite FOODWELL and Shinil Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FOODWELL position performs unexpectedly, Shinil Electronics 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 Shinil Electronics will offset losses from the drop in Shinil Electronics' long position.| FOODWELL vs. Daewon Media Co | FOODWELL vs. Next Entertainment World | FOODWELL vs. Barunson Entertainment Arts | FOODWELL vs. Cuckoo Homesys Co |
| Shinil Electronics vs. TS Investment Corp | Shinil Electronics vs. EBEST Investment Securities | Shinil Electronics vs. Digital Power Communications | Shinil Electronics vs. KTB Investment Securities |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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