Correlation Between Korea Real and Shinil Electronics
Can any of the company-specific risk be diversified away by investing in both Korea Real and Shinil Electronics 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 Korea Real and Shinil Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Real Estate and Shinil Electronics Co, you can compare the effects of market volatilities on Korea Real and Shinil Electronics 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 Korea Real with a short position of Shinil Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Real and Shinil Electronics.
Diversification Opportunities for Korea Real and Shinil Electronics
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Korea and Shinil is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Korea Real Estate and Shinil Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinil Electronics and Korea Real 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 Korea Real Estate are associated (or correlated) with Shinil Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinil Electronics has no effect on the direction of Korea Real i.e., Korea Real and Shinil Electronics go up and down completely randomly.
Pair Corralation between Korea Real and Shinil Electronics
Assuming the 90 days trading horizon Korea Real Estate is expected to under-perform the Shinil Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Korea Real Estate is 1.3 times less risky than Shinil Electronics. The stock trades about -0.15 of its potential returns per unit of risk. The Shinil Electronics Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 145,600 in Shinil Electronics Co on September 3, 2024 and sell it today you would lose (100.00) from holding Shinil Electronics Co or give up 0.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Real Estate vs. Shinil Electronics Co
Performance |
| Timeline |
| Korea Real Estate |
| Shinil Electronics |
Korea Real and Shinil Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Real and Shinil Electronics
The main advantage of trading using opposite Korea Real and Shinil Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Real position performs unexpectedly, Shinil Electronics 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 Shinil Electronics will offset losses from the drop in Shinil Electronics' long position.| Korea Real vs. Sejong Telecom | Korea Real vs. Mobileleader CoLtd | Korea Real vs. Lotte Data Communication | Korea Real vs. Wireless Power Amplifier |
| Shinil Electronics vs. Korea Real Estate | Shinil Electronics vs. Busan Industrial Co | Shinil Electronics vs. UNISEM Co | Shinil Electronics vs. RPBio Inc |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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