Correlation Between Shinsegae Food and Rorze Systems
Can any of the company-specific risk be diversified away by investing in both Shinsegae Food and Rorze Systems 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 Rorze Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinsegae Food and Rorze Systems, you can compare the effects of market volatilities on Shinsegae Food and Rorze Systems 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 Rorze Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Food and Rorze Systems.
Diversification Opportunities for Shinsegae Food and Rorze Systems
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinsegae and Rorze is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Food and Rorze Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rorze Systems 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 Rorze Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rorze Systems has no effect on the direction of Shinsegae Food i.e., Shinsegae Food and Rorze Systems go up and down completely randomly.
Pair Corralation between Shinsegae Food and Rorze Systems
Assuming the 90 days trading horizon Shinsegae Food is expected to under-perform the Rorze Systems. But the stock apears to be less risky and, when comparing its historical volatility, Shinsegae Food is 2.28 times less risky than Rorze Systems. The stock trades about -0.05 of its potential returns per unit of risk. The Rorze Systems is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 690,341 in Rorze Systems on September 12, 2024 and sell it today you would earn a total of 786,659 from holding Rorze Systems or generate 113.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.71% |
| Values | Daily Returns |
Shinsegae Food vs. Rorze Systems
Performance |
| Timeline |
| Shinsegae Food |
| Rorze Systems |
Shinsegae Food and Rorze Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Food and Rorze Systems
The main advantage of trading using opposite Shinsegae Food and Rorze Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Food position performs unexpectedly, Rorze Systems 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 Rorze Systems will offset losses from the drop in Rorze Systems' 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 |
| Rorze Systems vs. Semyung Electric Machinery | Rorze Systems vs. Kakao Games Corp | Rorze Systems vs. Korean Reinsurance Co | Rorze Systems vs. Tuksu Engineering ConstructionLtd |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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