Correlation Between Shinsegae Food and Tamul Multimedia
Can any of the company-specific risk be diversified away by investing in both Shinsegae Food and Tamul Multimedia 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 Tamul Multimedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinsegae Food and Tamul Multimedia Co, you can compare the effects of market volatilities on Shinsegae Food and Tamul Multimedia 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 Tamul Multimedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Food and Tamul Multimedia.
Diversification Opportunities for Shinsegae Food and Tamul Multimedia
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinsegae and Tamul is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Food and Tamul Multimedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tamul Multimedia 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 Tamul Multimedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tamul Multimedia has no effect on the direction of Shinsegae Food i.e., Shinsegae Food and Tamul Multimedia go up and down completely randomly.
Pair Corralation between Shinsegae Food and Tamul Multimedia
Assuming the 90 days trading horizon Shinsegae Food is expected to under-perform the Tamul Multimedia. But the stock apears to be less risky and, when comparing its historical volatility, Shinsegae Food is 8.1 times less risky than Tamul Multimedia. The stock trades about 0.0 of its potential returns per unit of risk. The Tamul Multimedia Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 344,500 in Tamul Multimedia Co on November 29, 2024 and sell it today you would earn a total of 32,500 from holding Tamul Multimedia Co or generate 9.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae Food vs. Tamul Multimedia Co
Performance |
| Timeline |
| Shinsegae Food |
| Tamul Multimedia |
Shinsegae Food and Tamul Multimedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Food and Tamul Multimedia
The main advantage of trading using opposite Shinsegae Food and Tamul Multimedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Food position performs unexpectedly, Tamul Multimedia 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 Tamul Multimedia will offset losses from the drop in Tamul Multimedia's long position.| Shinsegae Food vs. Hanjoo Light Metal | Shinsegae Food vs. Lotte Chilsung Beverage | Shinsegae Food vs. Digital Power Communications | Shinsegae Food vs. Dongil Metal Co |
| Tamul Multimedia vs. DoubleU Games Co | Tamul Multimedia vs. Aprogen Healthcare Games | Tamul Multimedia vs. Hanjoo Light Metal | Tamul Multimedia vs. Wave Electronics 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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