Correlation Between Shinsegae Food and Heerim Architects
Can any of the company-specific risk be diversified away by investing in both Shinsegae Food and Heerim Architects 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 Heerim Architects into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinsegae Food and Heerim Architects Planners, you can compare the effects of market volatilities on Shinsegae Food and Heerim Architects 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 Heerim Architects. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Food and Heerim Architects.
Diversification Opportunities for Shinsegae Food and Heerim Architects
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinsegae and Heerim is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Food and Heerim Architects Planners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heerim Architects 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 Heerim Architects. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heerim Architects has no effect on the direction of Shinsegae Food i.e., Shinsegae Food and Heerim Architects go up and down completely randomly.
Pair Corralation between Shinsegae Food and Heerim Architects
Assuming the 90 days trading horizon Shinsegae Food is expected to generate 0.44 times more return on investment than Heerim Architects. However, Shinsegae Food is 2.26 times less risky than Heerim Architects. It trades about -0.05 of its potential returns per unit of risk. Heerim Architects Planners is currently generating about -0.04 per unit of risk. If you would invest 3,857,742 in Shinsegae Food on September 14, 2024 and sell it today you would lose (722,742) from holding Shinsegae Food or give up 18.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Shinsegae Food vs. Heerim Architects Planners
Performance |
| Timeline |
| Shinsegae Food |
| Heerim Architects |
Shinsegae Food and Heerim Architects Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Food and Heerim Architects
The main advantage of trading using opposite Shinsegae Food and Heerim Architects positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Food position performs unexpectedly, Heerim Architects 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 Heerim Architects will offset losses from the drop in Heerim Architects' long position.| Shinsegae Food vs. Daou Data Corp | Shinsegae Food vs. Solution Advanced Technology | Shinsegae Food vs. Busan Industrial Co | Shinsegae Food vs. Busan Ind |
| Heerim Architects vs. Sungmoon Electronics Co | Heerim Architects vs. Daejung Chemicals Metals | Heerim Architects vs. Miwon Chemicals Co | Heerim Architects vs. LG Chemicals |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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