Correlation Between Shinsegae Engineering and Jeju Beer
Can any of the company-specific risk be diversified away by investing in both Shinsegae Engineering and Jeju Beer 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 Jeju Beer 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 Jeju Beer Co, you can compare the effects of market volatilities on Shinsegae Engineering and Jeju Beer 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 Jeju Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Engineering and Jeju Beer.
Diversification Opportunities for Shinsegae Engineering and Jeju Beer
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shinsegae and Jeju is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Engineering Construc and Jeju Beer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Beer 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 Jeju Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Beer has no effect on the direction of Shinsegae Engineering i.e., Shinsegae Engineering and Jeju Beer go up and down completely randomly.
Pair Corralation between Shinsegae Engineering and Jeju Beer
Assuming the 90 days trading horizon Shinsegae Engineering Construction is expected to generate 0.48 times more return on investment than Jeju Beer. However, Shinsegae Engineering Construction is 2.08 times less risky than Jeju Beer. It trades about 0.12 of its potential returns per unit of risk. Jeju Beer Co is currently generating about -0.06 per unit of risk. If you would invest 1,300,000 in Shinsegae Engineering Construction on September 5, 2024 and sell it today you would earn a total of 504,000 from holding Shinsegae Engineering Construction or generate 38.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.18% |
| Values | Daily Returns |
Shinsegae Engineering Construc vs. Jeju Beer Co
Performance |
| Timeline |
| Shinsegae Engineering |
| Jeju Beer |
Shinsegae Engineering and Jeju Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Engineering and Jeju Beer
The main advantage of trading using opposite Shinsegae Engineering and Jeju Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Engineering position performs unexpectedly, Jeju Beer 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 Jeju Beer will offset losses from the drop in Jeju Beer's long position.| Shinsegae Engineering vs. AptaBio Therapeutics | Shinsegae Engineering vs. Daewoo SBI SPAC | Shinsegae Engineering vs. Dream Security co | Shinsegae Engineering vs. Microfriend |
| Jeju Beer vs. AptaBio Therapeutics | Jeju Beer vs. Daewoo SBI SPAC | Jeju Beer vs. Dream Security co | Jeju Beer 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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