Correlation Between Stic Investments and Shinsegae Engineering
Can any of the company-specific risk be diversified away by investing in both Stic Investments and Shinsegae Engineering 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 Stic Investments and Shinsegae Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stic Investments and Shinsegae Engineering Construction, you can compare the effects of market volatilities on Stic Investments and Shinsegae Engineering 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 Stic Investments with a short position of Shinsegae Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stic Investments and Shinsegae Engineering.
Diversification Opportunities for Stic Investments and Shinsegae Engineering
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stic and Shinsegae is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Stic Investments and Shinsegae Engineering Construc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Engineering and Stic Investments 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 Stic Investments are associated (or correlated) with Shinsegae Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Engineering has no effect on the direction of Stic Investments i.e., Stic Investments and Shinsegae Engineering go up and down completely randomly.
Pair Corralation between Stic Investments and Shinsegae Engineering
Assuming the 90 days trading horizon Stic Investments is expected to under-perform the Shinsegae Engineering. In addition to that, Stic Investments is 21.69 times more volatile than Shinsegae Engineering Construction. It trades about -0.01 of its total potential returns per unit of risk. Shinsegae Engineering Construction is currently generating about -0.18 per unit of volatility. If you would invest 1,816,000 in Shinsegae Engineering Construction on August 29, 2024 and sell it today you would lose (14,000) from holding Shinsegae Engineering Construction or give up 0.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.5% |
| Values | Daily Returns |
Stic Investments vs. Shinsegae Engineering Construc
Performance |
| Timeline |
| Stic Investments |
| Shinsegae Engineering |
Stic Investments and Shinsegae Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stic Investments and Shinsegae Engineering
The main advantage of trading using opposite Stic Investments and Shinsegae Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stic Investments position performs unexpectedly, Shinsegae Engineering 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 Engineering will offset losses from the drop in Shinsegae Engineering's long position.| Stic Investments vs. Daou Data Corp | Stic Investments vs. Busan Industrial Co | Stic Investments vs. Busan Ind | Stic Investments vs. Shinhan WTI Futures |
| Shinsegae Engineering vs. AptaBio Therapeutics | Shinsegae Engineering vs. Daewoo SBI SPAC | Shinsegae Engineering vs. Dream Security co | Shinsegae Engineering 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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