Correlation Between Shinsegae Food and Foodnamoo
Can any of the company-specific risk be diversified away by investing in both Shinsegae Food and Foodnamoo 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 Foodnamoo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinsegae Food and Foodnamoo, you can compare the effects of market volatilities on Shinsegae Food and Foodnamoo 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 Foodnamoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Food and Foodnamoo.
Diversification Opportunities for Shinsegae Food and Foodnamoo
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shinsegae and Foodnamoo is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Food and Foodnamoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foodnamoo 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 Foodnamoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foodnamoo has no effect on the direction of Shinsegae Food i.e., Shinsegae Food and Foodnamoo go up and down completely randomly.
Pair Corralation between Shinsegae Food and Foodnamoo
Assuming the 90 days trading horizon Shinsegae Food is expected to generate 0.52 times more return on investment than Foodnamoo. However, Shinsegae Food is 1.94 times less risky than Foodnamoo. It trades about -0.02 of its potential returns per unit of risk. Foodnamoo is currently generating about -0.07 per unit of risk. If you would invest 3,730,295 in Shinsegae Food on November 9, 2024 and sell it today you would lose (570,295) from holding Shinsegae Food or give up 15.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae Food vs. Foodnamoo
Performance |
| Timeline |
| Shinsegae Food |
| Foodnamoo |
Shinsegae Food and Foodnamoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Food and Foodnamoo
The main advantage of trading using opposite Shinsegae Food and Foodnamoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Food position performs unexpectedly, Foodnamoo 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 Foodnamoo will offset losses from the drop in Foodnamoo'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 |
| Foodnamoo vs. Cherrybro coLtd | Foodnamoo vs. Busan Industrial Co | Foodnamoo vs. Busan Ind | Foodnamoo vs. Mirae Asset Daewoo |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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