Correlation Between Korean Drug and Shinsegae Information
Can any of the company-specific risk be diversified away by investing in both Korean Drug 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 Korean Drug and Shinsegae Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korean Drug Co and Shinsegae Information Communication, you can compare the effects of market volatilities on Korean Drug 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 Korean Drug with a short position of Shinsegae Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Drug and Shinsegae Information.
Diversification Opportunities for Korean Drug and Shinsegae Information
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korean and Shinsegae is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Korean Drug Co and Shinsegae Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Information and Korean Drug 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 Korean Drug Co 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 Korean Drug i.e., Korean Drug and Shinsegae Information go up and down completely randomly.
Pair Corralation between Korean Drug and Shinsegae Information
Assuming the 90 days trading horizon Korean Drug Co is expected to under-perform the Shinsegae Information. In addition to that, Korean Drug is 1.5 times more volatile than Shinsegae Information Communication. It trades about -0.09 of its total potential returns per unit of risk. Shinsegae Information Communication is currently generating about -0.09 per unit of volatility. If you would invest 1,089,000 in Shinsegae Information Communication on September 1, 2024 and sell it today you would lose (200,000) from holding Shinsegae Information Communication or give up 18.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korean Drug Co vs. Shinsegae Information Communic
Performance |
| Timeline |
| Korean Drug |
| Shinsegae Information |
Korean Drug and Shinsegae Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Drug and Shinsegae Information
The main advantage of trading using opposite Korean Drug and Shinsegae Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Drug 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.| Korean Drug vs. Digital Power Communications | Korean Drug vs. Grand Korea Leisure | Korean Drug vs. ITM Semiconductor Co | Korean Drug vs. Shinsegae Information Communication |
| Shinsegae Information vs. AptaBio Therapeutics | Shinsegae Information vs. Daewoo SBI SPAC | Shinsegae Information vs. Dream Security co | Shinsegae Information vs. Microfriend |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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