Correlation Between Daewoo Electronic and Shinil Electronics
Can any of the company-specific risk be diversified away by investing in both Daewoo Electronic 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 Daewoo Electronic and Shinil Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daewoo Electronic Components and Shinil Electronics Co, you can compare the effects of market volatilities on Daewoo Electronic 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 Daewoo Electronic with a short position of Shinil Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo Electronic and Shinil Electronics.
Diversification Opportunities for Daewoo Electronic and Shinil Electronics
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daewoo and Shinil is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo Electronic Components and Shinil Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinil Electronics and Daewoo Electronic 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 Daewoo Electronic Components 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 Daewoo Electronic i.e., Daewoo Electronic and Shinil Electronics go up and down completely randomly.
Pair Corralation between Daewoo Electronic and Shinil Electronics
Assuming the 90 days trading horizon Daewoo Electronic Components is expected to generate 0.54 times more return on investment than Shinil Electronics. However, Daewoo Electronic Components is 1.87 times less risky than Shinil Electronics. It trades about -0.24 of its potential returns per unit of risk. Shinil Electronics Co is currently generating about -0.3 per unit of risk. If you would invest 102,600 in Daewoo Electronic Components on November 5, 2024 and sell it today you would lose (1,700) from holding Daewoo Electronic Components or give up 1.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewoo Electronic Components vs. Shinil Electronics Co
Performance |
| Timeline |
| Daewoo Electronic |
| Shinil Electronics |
Daewoo Electronic and Shinil Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo Electronic and Shinil Electronics
The main advantage of trading using opposite Daewoo Electronic and Shinil Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo Electronic 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.| Daewoo Electronic vs. Samsung Electronics Co | Daewoo Electronic vs. Samsung Electronics Co | Daewoo Electronic vs. LG Energy Solution | Daewoo Electronic vs. SK Hynix |
| Shinil Electronics vs. Samsung Electronics Co | Shinil Electronics vs. Samsung Electronics Co | Shinil Electronics vs. Hyundai Motor Co | Shinil Electronics vs. Hyundai Motor |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |