Correlation Between Shinsegae Engineering and CBI
Can any of the company-specific risk be diversified away by investing in both Shinsegae Engineering and CBI 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 Engineering and CBI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinsegae Engineering Construction and CBI Co, you can compare the effects of market volatilities on Shinsegae Engineering and CBI 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 Engineering with a short position of CBI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Engineering and CBI.
Diversification Opportunities for Shinsegae Engineering and CBI
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinsegae and CBI is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Engineering Construc and CBI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBI Co and Shinsegae Engineering 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 Engineering Construction are associated (or correlated) with CBI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBI Co has no effect on the direction of Shinsegae Engineering i.e., Shinsegae Engineering and CBI go up and down completely randomly.
Pair Corralation between Shinsegae Engineering and CBI
Assuming the 90 days trading horizon Shinsegae Engineering Construction is expected to generate 0.65 times more return on investment than CBI. However, Shinsegae Engineering Construction is 1.53 times less risky than CBI. It trades about 0.02 of its potential returns per unit of risk. CBI Co is currently generating about -0.06 per unit of risk. If you would invest 1,654,646 in Shinsegae Engineering Construction on September 12, 2024 and sell it today you would earn a total of 150,354 from holding Shinsegae Engineering Construction or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.44% |
| Values | Daily Returns |
Shinsegae Engineering Construc vs. CBI Co
Performance |
| Timeline |
| Shinsegae Engineering |
| CBI Co |
Shinsegae Engineering and CBI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Engineering and CBI
The main advantage of trading using opposite Shinsegae Engineering and CBI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Engineering position performs unexpectedly, CBI 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 CBI will offset losses from the drop in CBI's long position.| Shinsegae Engineering vs. Samsung Electronics Co | Shinsegae Engineering vs. Samsung Electronics Co | Shinsegae Engineering vs. SK Hynix | Shinsegae Engineering vs. POSCO Holdings |
| CBI vs. Hanshin Construction Co | CBI vs. Dongwoo Farm To | CBI vs. Samsung Life Insurance | CBI vs. Shinsegae Engineering Construction |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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