Correlation Between Shinsegae Food and ISU Abxis
Can any of the company-specific risk be diversified away by investing in both Shinsegae Food and ISU Abxis 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 ISU Abxis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinsegae Food and ISU Abxis Co, you can compare the effects of market volatilities on Shinsegae Food and ISU Abxis 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 ISU Abxis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Food and ISU Abxis.
Diversification Opportunities for Shinsegae Food and ISU Abxis
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shinsegae and ISU is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Food and ISU Abxis Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ISU Abxis 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 ISU Abxis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ISU Abxis has no effect on the direction of Shinsegae Food i.e., Shinsegae Food and ISU Abxis go up and down completely randomly.
Pair Corralation between Shinsegae Food and ISU Abxis
Assuming the 90 days trading horizon Shinsegae Food is expected to generate 0.64 times more return on investment than ISU Abxis. However, Shinsegae Food is 1.56 times less risky than ISU Abxis. It trades about -0.1 of its potential returns per unit of risk. ISU Abxis Co is currently generating about -0.09 per unit of risk. If you would invest 3,845,000 in Shinsegae Food on September 1, 2024 and sell it today you would lose (695,000) from holding Shinsegae Food or give up 18.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.19% |
| Values | Daily Returns |
Shinsegae Food vs. ISU Abxis Co
Performance |
| Timeline |
| Shinsegae Food |
| ISU Abxis |
Shinsegae Food and ISU Abxis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Food and ISU Abxis
The main advantage of trading using opposite Shinsegae Food and ISU Abxis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Food position performs unexpectedly, ISU Abxis 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 ISU Abxis will offset losses from the drop in ISU Abxis' long position.| Shinsegae Food vs. LG Display | Shinsegae Food vs. Hyundai Motor Co | Shinsegae Food vs. Hyundai Motor Co | Shinsegae Food vs. Adaptive Plasma Technology |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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