Correlation Between Shinsegae Engineering and Namu Tech
Can any of the company-specific risk be diversified away by investing in both Shinsegae Engineering and Namu Tech 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 Namu Tech 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 Namu Tech CoLtd, you can compare the effects of market volatilities on Shinsegae Engineering and Namu Tech 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 Namu Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Engineering and Namu Tech.
Diversification Opportunities for Shinsegae Engineering and Namu Tech
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shinsegae and Namu is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Engineering Construc and Namu Tech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namu Tech CoLtd 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 Namu Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namu Tech CoLtd has no effect on the direction of Shinsegae Engineering i.e., Shinsegae Engineering and Namu Tech go up and down completely randomly.
Pair Corralation between Shinsegae Engineering and Namu Tech
Assuming the 90 days trading horizon Shinsegae Engineering Construction is expected to generate 0.74 times more return on investment than Namu Tech. However, Shinsegae Engineering Construction is 1.35 times less risky than Namu Tech. It trades about 0.12 of its potential returns per unit of risk. Namu Tech CoLtd is currently generating about -0.06 per unit of risk. If you would invest 1,316,000 in Shinsegae Engineering Construction on September 22, 2024 and sell it today you would earn a total of 494,000 from holding Shinsegae Engineering Construction or generate 37.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae Engineering Construc vs. Namu Tech CoLtd
Performance |
| Timeline |
| Shinsegae Engineering |
| Namu Tech CoLtd |
Shinsegae Engineering and Namu Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Engineering and Namu Tech
The main advantage of trading using opposite Shinsegae Engineering and Namu Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Engineering position performs unexpectedly, Namu Tech 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 Namu Tech will offset losses from the drop in Namu Tech's long position.The idea behind Shinsegae Engineering Construction and Namu Tech CoLtd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Namu Tech vs. Shinsegae Engineering Construction | Namu Tech vs. Dongbang Ship Machinery | Namu Tech vs. Settlebank | Namu Tech vs. Camus 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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