Correlation Between Shinsegae Engineering and Digital Multimedia
Can any of the company-specific risk be diversified away by investing in both Shinsegae Engineering and Digital Multimedia 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 Digital Multimedia 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 Digital Multimedia Technology, you can compare the effects of market volatilities on Shinsegae Engineering and Digital Multimedia 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 Digital Multimedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Engineering and Digital Multimedia.
Diversification Opportunities for Shinsegae Engineering and Digital Multimedia
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shinsegae and Digital is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Engineering Construc and Digital Multimedia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Multimedia 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 Digital Multimedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Multimedia has no effect on the direction of Shinsegae Engineering i.e., Shinsegae Engineering and Digital Multimedia go up and down completely randomly.
Pair Corralation between Shinsegae Engineering and Digital Multimedia
Assuming the 90 days trading horizon Shinsegae Engineering Construction is expected to generate 0.98 times more return on investment than Digital Multimedia. However, Shinsegae Engineering Construction is 1.02 times less risky than Digital Multimedia. It trades about 0.12 of its potential returns per unit of risk. Digital Multimedia Technology is currently generating about -0.18 per unit of risk. If you would invest 1,270,000 in Shinsegae Engineering Construction on September 2, 2024 and sell it today you would earn a total of 533,000 from holding Shinsegae Engineering Construction or generate 41.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Shinsegae Engineering Construc vs. Digital Multimedia Technology
Performance |
| Timeline |
| Shinsegae Engineering |
| Digital Multimedia |
Shinsegae Engineering and Digital Multimedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Engineering and Digital Multimedia
The main advantage of trading using opposite Shinsegae Engineering and Digital Multimedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Engineering position performs unexpectedly, Digital Multimedia 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 Digital Multimedia will offset losses from the drop in Digital Multimedia's long position.| Shinsegae Engineering vs. National Plastic Co | Shinsegae Engineering vs. Daol Investment Securities | Shinsegae Engineering vs. Woori Technology Investment | Shinsegae Engineering vs. SK Chemicals Co |
| Digital Multimedia vs. AptaBio Therapeutics | Digital Multimedia vs. Daewoo SBI SPAC | Digital Multimedia vs. Dream Security co | Digital Multimedia vs. Microfriend |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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