Correlation Between Korea Shipbuilding and SPG
Can any of the company-specific risk be diversified away by investing in both Korea Shipbuilding and SPG 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 Korea Shipbuilding and SPG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Shipbuilding Offshore and SPG Co, you can compare the effects of market volatilities on Korea Shipbuilding and SPG 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 Korea Shipbuilding with a short position of SPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Shipbuilding and SPG.
Diversification Opportunities for Korea Shipbuilding and SPG
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and SPG is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Korea Shipbuilding Offshore and SPG Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPG Co and Korea Shipbuilding 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 Korea Shipbuilding Offshore are associated (or correlated) with SPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPG Co has no effect on the direction of Korea Shipbuilding i.e., Korea Shipbuilding and SPG go up and down completely randomly.
Pair Corralation between Korea Shipbuilding and SPG
Assuming the 90 days trading horizon Korea Shipbuilding Offshore is expected to generate 1.07 times more return on investment than SPG. However, Korea Shipbuilding is 1.07 times more volatile than SPG Co. It trades about 0.13 of its potential returns per unit of risk. SPG Co is currently generating about -0.04 per unit of risk. If you would invest 11,190,000 in Korea Shipbuilding Offshore on August 27, 2024 and sell it today you would earn a total of 8,960,000 from holding Korea Shipbuilding Offshore or generate 80.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Shipbuilding Offshore vs. SPG Co
Performance |
| Timeline |
| Korea Shipbuilding |
| SPG Co |
Korea Shipbuilding and SPG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Shipbuilding and SPG
The main advantage of trading using opposite Korea Shipbuilding and SPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Shipbuilding position performs unexpectedly, SPG 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 SPG will offset losses from the drop in SPG's long position.| Korea Shipbuilding vs. Samsung Electronics Co | Korea Shipbuilding vs. Samsung Electronics Co | Korea Shipbuilding vs. Hyundai Motor Co | Korea Shipbuilding vs. Hyundai Motor |
| SPG vs. Jinro Distillers Co | SPG vs. Shinhan Inverse Copper | SPG vs. Daejung Chemicals Metals | SPG vs. Korea Shipbuilding Offshore |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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