Correlation Between Heungkuk Metaltech and Shinsegae Information
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech and Shinsegae Information 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 Heungkuk Metaltech and Shinsegae Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heungkuk Metaltech CoLtd and Shinsegae Information Communication, you can compare the effects of market volatilities on Heungkuk Metaltech and Shinsegae Information 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 Heungkuk Metaltech with a short position of Shinsegae Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and Shinsegae Information.
Diversification Opportunities for Heungkuk Metaltech and Shinsegae Information
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Heungkuk and Shinsegae is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and Shinsegae Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Information and Heungkuk Metaltech 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 Heungkuk Metaltech CoLtd are associated (or correlated) with Shinsegae Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Information has no effect on the direction of Heungkuk Metaltech i.e., Heungkuk Metaltech and Shinsegae Information go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and Shinsegae Information
Assuming the 90 days trading horizon Heungkuk Metaltech CoLtd is expected to generate 0.87 times more return on investment than Shinsegae Information. However, Heungkuk Metaltech CoLtd is 1.15 times less risky than Shinsegae Information. It trades about -0.01 of its potential returns per unit of risk. Shinsegae Information Communication is currently generating about -0.28 per unit of risk. If you would invest 484,500 in Heungkuk Metaltech CoLtd on September 5, 2024 and sell it today you would lose (2,000) from holding Heungkuk Metaltech CoLtd or give up 0.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heungkuk Metaltech CoLtd vs. Shinsegae Information Communic
Performance |
| Timeline |
| Heungkuk Metaltech CoLtd |
| Shinsegae Information |
Heungkuk Metaltech and Shinsegae Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heungkuk Metaltech and Shinsegae Information
The main advantage of trading using opposite Heungkuk Metaltech and Shinsegae Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech position performs unexpectedly, Shinsegae Information 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 Information will offset losses from the drop in Shinsegae Information's long position.| Heungkuk Metaltech vs. E Investment Development | Heungkuk Metaltech vs. SBI Investment KOREA | Heungkuk Metaltech vs. Hanwha InvestmentSecurities Co | Heungkuk Metaltech vs. LB Investment |
| Shinsegae Information vs. Korean Drug Co | Shinsegae Information vs. Shinsung Delta Tech | Shinsegae Information vs. Raontech | Shinsegae Information vs. Sungchang Autotech 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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