Correlation Between Shinsegae Engineering and Sungdo Engineering
Can any of the company-specific risk be diversified away by investing in both Shinsegae Engineering and Sungdo Engineering 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 Sungdo Engineering 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 Sungdo Engineering Construction, you can compare the effects of market volatilities on Shinsegae Engineering and Sungdo Engineering 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 Sungdo Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Engineering and Sungdo Engineering.
Diversification Opportunities for Shinsegae Engineering and Sungdo Engineering
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shinsegae and Sungdo is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Engineering Construc and Sungdo Engineering Constructio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungdo Engineering 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 Sungdo Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungdo Engineering has no effect on the direction of Shinsegae Engineering i.e., Shinsegae Engineering and Sungdo Engineering go up and down completely randomly.
Pair Corralation between Shinsegae Engineering and Sungdo Engineering
Assuming the 90 days trading horizon Shinsegae Engineering Construction is expected to generate 1.13 times more return on investment than Sungdo Engineering. However, Shinsegae Engineering is 1.13 times more volatile than Sungdo Engineering Construction. It trades about 0.02 of its potential returns per unit of risk. Sungdo Engineering Construction is currently generating about 0.01 per unit of risk. If you would invest 1,701,256 in Shinsegae Engineering Construction on September 5, 2024 and sell it today you would earn a total of 102,744 from holding Shinsegae Engineering Construction or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Shinsegae Engineering Construc vs. Sungdo Engineering Constructio
Performance |
| Timeline |
| Shinsegae Engineering |
| Sungdo Engineering |
Shinsegae Engineering and Sungdo Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Engineering and Sungdo Engineering
The main advantage of trading using opposite Shinsegae Engineering and Sungdo Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Engineering position performs unexpectedly, Sungdo Engineering 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 Sungdo Engineering will offset losses from the drop in Sungdo Engineering's long position.| Shinsegae Engineering vs. AptaBio Therapeutics | Shinsegae Engineering vs. Daewoo SBI SPAC | Shinsegae Engineering vs. Dream Security co | Shinsegae Engineering vs. Microfriend |
| Sungdo Engineering vs. JYP Entertainment Corp | Sungdo Engineering vs. Next Entertainment World | Sungdo Engineering vs. Cube Entertainment | Sungdo Engineering vs. Korea Petro Chemical |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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