Correlation Between Shinsegae Food and Daesung Industrial
Can any of the company-specific risk be diversified away by investing in both Shinsegae Food and Daesung Industrial 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 Daesung Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinsegae Food and Daesung Industrial Co, you can compare the effects of market volatilities on Shinsegae Food and Daesung Industrial 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 Daesung Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Food and Daesung Industrial.
Diversification Opportunities for Shinsegae Food and Daesung Industrial
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Shinsegae and Daesung is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Food and Daesung Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daesung Industrial 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 Daesung Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daesung Industrial has no effect on the direction of Shinsegae Food i.e., Shinsegae Food and Daesung Industrial go up and down completely randomly.
Pair Corralation between Shinsegae Food and Daesung Industrial
Assuming the 90 days trading horizon Shinsegae Food is expected to under-perform the Daesung Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Shinsegae Food is 1.37 times less risky than Daesung Industrial. The stock trades about -0.04 of its potential returns per unit of risk. The Daesung Industrial Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 411,500 in Daesung Industrial Co on November 9, 2024 and sell it today you would lose (93,000) from holding Daesung Industrial Co or give up 22.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae Food vs. Daesung Industrial Co
Performance |
| Timeline |
| Shinsegae Food |
| Daesung Industrial |
Shinsegae Food and Daesung Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Food and Daesung Industrial
The main advantage of trading using opposite Shinsegae Food and Daesung Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Food position performs unexpectedly, Daesung Industrial 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 Daesung Industrial will offset losses from the drop in Daesung Industrial's long position.| Shinsegae Food vs. Tae Kyung Chemical | Shinsegae Food vs. Solus Advanced Materials | Shinsegae Food vs. RF Materials Co | Shinsegae Food vs. EV Advanced Material |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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