Correlation Between Shinsegae Food and Seojin Automotive
Can any of the company-specific risk be diversified away by investing in both Shinsegae Food and Seojin Automotive 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 Seojin Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinsegae Food and Seojin Automotive CoLtd, you can compare the effects of market volatilities on Shinsegae Food and Seojin Automotive 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 Seojin Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Food and Seojin Automotive.
Diversification Opportunities for Shinsegae Food and Seojin Automotive
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shinsegae and Seojin is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Food and Seojin Automotive CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seojin Automotive CoLtd 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 Seojin Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seojin Automotive CoLtd has no effect on the direction of Shinsegae Food i.e., Shinsegae Food and Seojin Automotive go up and down completely randomly.
Pair Corralation between Shinsegae Food and Seojin Automotive
Assuming the 90 days trading horizon Shinsegae Food is expected to under-perform the Seojin Automotive. But the stock apears to be less risky and, when comparing its historical volatility, Shinsegae Food is 1.1 times less risky than Seojin Automotive. The stock trades about -0.04 of its potential returns per unit of risk. The Seojin Automotive CoLtd is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 181,700 in Seojin Automotive CoLtd on December 4, 2024 and sell it today you would earn a total of 6,700 from holding Seojin Automotive CoLtd or generate 3.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae Food vs. Seojin Automotive CoLtd
Performance |
| Timeline |
| Shinsegae Food |
| Seojin Automotive CoLtd |
Shinsegae Food and Seojin Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Food and Seojin Automotive
The main advantage of trading using opposite Shinsegae Food and Seojin Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Food position performs unexpectedly, Seojin Automotive 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 Seojin Automotive will offset losses from the drop in Seojin Automotive's long position.| Shinsegae Food vs. Incar Financial Service | Shinsegae Food vs. Hyundai Green Food | Shinsegae Food vs. Seoul Food Industrial | Shinsegae Food vs. Pureun Mutual Savings |
| Seojin Automotive vs. CJ Seafood Corp | Seojin Automotive vs. FOODWELL Co | Seojin Automotive vs. Dong A Steel Technology | Seojin Automotive vs. Orbitech 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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