Correlation Between Shinsegae Food and Woori Technology
Can any of the company-specific risk be diversified away by investing in both Shinsegae Food and Woori Technology 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 Woori Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinsegae Food and Woori Technology Investment, you can compare the effects of market volatilities on Shinsegae Food and Woori Technology 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 Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Food and Woori Technology.
Diversification Opportunities for Shinsegae Food and Woori Technology
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinsegae and Woori is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Food and Woori Technology Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Technology Inv 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 Woori Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woori Technology Inv has no effect on the direction of Shinsegae Food i.e., Shinsegae Food and Woori Technology go up and down completely randomly.
Pair Corralation between Shinsegae Food and Woori Technology
Assuming the 90 days trading horizon Shinsegae Food is expected to generate 1.45 times more return on investment than Woori Technology. However, Shinsegae Food is 1.45 times more volatile than Woori Technology Investment. It trades about 0.21 of its potential returns per unit of risk. Woori Technology Investment is currently generating about -0.36 per unit of risk. If you would invest 3,095,000 in Shinsegae Food on October 1, 2024 and sell it today you would earn a total of 705,000 from holding Shinsegae Food or generate 22.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae Food vs. Woori Technology Investment
Performance |
| Timeline |
| Shinsegae Food |
| Woori Technology Inv |
Shinsegae Food and Woori Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Food and Woori Technology
The main advantage of trading using opposite Shinsegae Food and Woori Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Food position performs unexpectedly, Woori Technology 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 Woori Technology will offset losses from the drop in Woori Technology's long position.| Shinsegae Food vs. Woori Technology Investment | Shinsegae Food vs. Samsung Card Co | Shinsegae Food vs. Korea Real Estate | Shinsegae Food vs. CHOROKBAEM PANY Co |
| Woori Technology vs. KB Financial Group | Woori Technology vs. Hyundai Motor | Woori Technology vs. Hyundai Motor Co | Woori Technology vs. Hyundai Motor Co |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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