Correlation Between Shinsegae Food and Korea Industrial
Can any of the company-specific risk be diversified away by investing in both Shinsegae Food and Korea Industrial 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 Shinsegae Food and Korea Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinsegae Food and Korea Industrial Co, you can compare the effects of market volatilities on Shinsegae Food and Korea Industrial 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 Shinsegae Food with a short position of Korea Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Food and Korea Industrial.
Diversification Opportunities for Shinsegae Food and Korea Industrial
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinsegae and Korea is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Food and Korea Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Industrial and Shinsegae Food 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 Shinsegae Food are associated (or correlated) with Korea Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Industrial has no effect on the direction of Shinsegae Food i.e., Shinsegae Food and Korea Industrial go up and down completely randomly.
Pair Corralation between Shinsegae Food and Korea Industrial
Assuming the 90 days trading horizon Shinsegae Food is expected to generate 0.65 times more return on investment than Korea Industrial. However, Shinsegae Food is 1.54 times less risky than Korea Industrial. It trades about 0.01 of its potential returns per unit of risk. Korea Industrial Co is currently generating about -0.05 per unit of risk. If you would invest 3,160,000 in Shinsegae Food on December 8, 2024 and sell it today you would earn a total of 0.00 from holding Shinsegae Food or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae Food vs. Korea Industrial Co
Performance |
| Timeline |
| Shinsegae Food |
| Korea Industrial |
Shinsegae Food and Korea Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Food and Korea Industrial
The main advantage of trading using opposite Shinsegae Food and Korea Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Food position performs unexpectedly, Korea Industrial 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 Korea Industrial will offset losses from the drop in Korea Industrial's long position.| Shinsegae Food vs. Digital Multimedia Technology | ||
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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