Correlation Between Shinsegae Information and Dongbang Transport
Can any of the company-specific risk be diversified away by investing in both Shinsegae Information and Dongbang Transport 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 Information and Dongbang Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinsegae Information Communication and Dongbang Transport Logistics, you can compare the effects of market volatilities on Shinsegae Information and Dongbang Transport 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 Information with a short position of Dongbang Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Information and Dongbang Transport.
Diversification Opportunities for Shinsegae Information and Dongbang Transport
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shinsegae and Dongbang is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Information Communic and Dongbang Transport Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbang Transport and Shinsegae Information 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 Information Communication are associated (or correlated) with Dongbang Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbang Transport has no effect on the direction of Shinsegae Information i.e., Shinsegae Information and Dongbang Transport go up and down completely randomly.
Pair Corralation between Shinsegae Information and Dongbang Transport
Assuming the 90 days trading horizon Shinsegae Information Communication is expected to under-perform the Dongbang Transport. But the stock apears to be less risky and, when comparing its historical volatility, Shinsegae Information Communication is 1.72 times less risky than Dongbang Transport. The stock trades about -0.23 of its potential returns per unit of risk. The Dongbang Transport Logistics is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 225,000 in Dongbang Transport Logistics on September 12, 2024 and sell it today you would lose (21,000) from holding Dongbang Transport Logistics or give up 9.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae Information Communic vs. Dongbang Transport Logistics
Performance |
| Timeline |
| Shinsegae Information |
| Dongbang Transport |
Shinsegae Information and Dongbang Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Information and Dongbang Transport
The main advantage of trading using opposite Shinsegae Information and Dongbang Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Information position performs unexpectedly, Dongbang Transport 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 Dongbang Transport will offset losses from the drop in Dongbang Transport's long position.| Shinsegae Information vs. Samsung Electronics Co | Shinsegae Information vs. Samsung Electronics Co | Shinsegae Information vs. SK Hynix | Shinsegae Information vs. POSCO Holdings |
| Dongbang Transport vs. Samsung Electronics Co | Dongbang Transport vs. Samsung Electronics Co | Dongbang Transport vs. SK Hynix | Dongbang Transport vs. POSCO Holdings |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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