Correlation Between Shinsegae Engineering and SEOJEON ELECTRIC
Can any of the company-specific risk be diversified away by investing in both Shinsegae Engineering and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC 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 SEOJEON ELECTRIC MACHINERY, you can compare the effects of market volatilities on Shinsegae Engineering and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Engineering and SEOJEON ELECTRIC.
Diversification Opportunities for Shinsegae Engineering and SEOJEON ELECTRIC
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinsegae and SEOJEON is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Engineering Construc and SEOJEON ELECTRIC MACHINERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEOJEON ELECTRIC MAC 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 SEOJEON ELECTRIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEOJEON ELECTRIC MAC has no effect on the direction of Shinsegae Engineering i.e., Shinsegae Engineering and SEOJEON ELECTRIC go up and down completely randomly.
Pair Corralation between Shinsegae Engineering and SEOJEON ELECTRIC
Assuming the 90 days trading horizon Shinsegae Engineering is expected to generate 99.85 times less return on investment than SEOJEON ELECTRIC. But when comparing it to its historical volatility, Shinsegae Engineering Construction is 81.62 times less risky than SEOJEON ELECTRIC. It trades about 0.27 of its potential returns per unit of risk. SEOJEON ELECTRIC MACHINERY is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 388,500 in SEOJEON ELECTRIC MACHINERY on November 1, 2024 and sell it today you would earn a total of 113,500 from holding SEOJEON ELECTRIC MACHINERY or generate 29.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae Engineering Construc vs. SEOJEON ELECTRIC MACHINERY
Performance |
| Timeline |
| Shinsegae Engineering |
| SEOJEON ELECTRIC MAC |
Shinsegae Engineering and SEOJEON ELECTRIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Engineering and SEOJEON ELECTRIC
The main advantage of trading using opposite Shinsegae Engineering and SEOJEON ELECTRIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Engineering position performs unexpectedly, SEOJEON ELECTRIC 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 SEOJEON ELECTRIC will offset losses from the drop in SEOJEON ELECTRIC's long position.| Shinsegae Engineering vs. KB Financial Group | Shinsegae Engineering vs. Shinhan Financial Group | Shinsegae Engineering vs. Hana Financial | Shinsegae Engineering vs. Woori Financial Group |
| SEOJEON ELECTRIC vs. DSC Investment | SEOJEON ELECTRIC vs. KTB Investment Securities | SEOJEON ELECTRIC vs. Display Tech Co | SEOJEON ELECTRIC vs. Daishin Information Communications |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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