Correlation Between SHINWON STRUCTION and EE HWA
Can any of the company-specific risk be diversified away by investing in both SHINWON STRUCTION and EE HWA 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 SHINWON STRUCTION and EE HWA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHINWON STRUCTION COMPANY and EE HWA Construction Co, you can compare the effects of market volatilities on SHINWON STRUCTION and EE HWA 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 SHINWON STRUCTION with a short position of EE HWA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHINWON STRUCTION and EE HWA.
Diversification Opportunities for SHINWON STRUCTION and EE HWA
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SHINWON and 001840 is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding SHINWON STRUCTION COMPANY and EE HWA Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EE HWA Construction and SHINWON STRUCTION 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 SHINWON STRUCTION COMPANY are associated (or correlated) with EE HWA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EE HWA Construction has no effect on the direction of SHINWON STRUCTION i.e., SHINWON STRUCTION and EE HWA go up and down completely randomly.
Pair Corralation between SHINWON STRUCTION and EE HWA
Assuming the 90 days trading horizon SHINWON STRUCTION is expected to generate 6.27 times less return on investment than EE HWA. But when comparing it to its historical volatility, SHINWON STRUCTION COMPANY is 1.54 times less risky than EE HWA. It trades about 0.03 of its potential returns per unit of risk. EE HWA Construction Co is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 250,000 in EE HWA Construction Co on August 24, 2024 and sell it today you would earn a total of 45,000 from holding EE HWA Construction Co or generate 18.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHINWON STRUCTION COMPANY vs. EE HWA Construction Co
Performance |
| Timeline |
| SHINWON STRUCTION PANY |
| EE HWA Construction |
SHINWON STRUCTION and EE HWA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHINWON STRUCTION and EE HWA
The main advantage of trading using opposite SHINWON STRUCTION and EE HWA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHINWON STRUCTION position performs unexpectedly, EE HWA 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 EE HWA will offset losses from the drop in EE HWA's long position.| SHINWON STRUCTION vs. Ssangyong Information Communication | SHINWON STRUCTION vs. Sangsin Energy Display | SHINWON STRUCTION vs. InnoTherapy | SHINWON STRUCTION vs. Jinro Distillers Co |
| EE HWA vs. Hanyang ENG Co | EE HWA vs. Nam Hwa Construction | EE HWA vs. KT Submarine Co | EE HWA vs. SEOHAN Const EngcoLtd |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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