Correlation Between Shinsegae Information and Dongwon System
Can any of the company-specific risk be diversified away by investing in both Shinsegae Information and Dongwon System 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 Dongwon System 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 Dongwon System, you can compare the effects of market volatilities on Shinsegae Information and Dongwon System 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 Dongwon System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Information and Dongwon System.
Diversification Opportunities for Shinsegae Information and Dongwon System
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinsegae and Dongwon is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Information Communic and Dongwon System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwon System 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 Dongwon System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwon System has no effect on the direction of Shinsegae Information i.e., Shinsegae Information and Dongwon System go up and down completely randomly.
Pair Corralation between Shinsegae Information and Dongwon System
Assuming the 90 days trading horizon Shinsegae Information Communication is expected to generate 3.02 times more return on investment than Dongwon System. However, Shinsegae Information is 3.02 times more volatile than Dongwon System. It trades about 0.27 of its potential returns per unit of risk. Dongwon System is currently generating about -0.21 per unit of risk. If you would invest 910,000 in Shinsegae Information Communication on September 24, 2024 and sell it today you would earn a total of 494,000 from holding Shinsegae Information Communication or generate 54.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae Information Communic vs. Dongwon System
Performance |
| Timeline |
| Shinsegae Information |
| Dongwon System |
Shinsegae Information and Dongwon System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Information and Dongwon System
The main advantage of trading using opposite Shinsegae Information and Dongwon System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Information position performs unexpectedly, Dongwon System 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 Dongwon System will offset losses from the drop in Dongwon System's long position.| Shinsegae Information vs. AptaBio Therapeutics | Shinsegae Information vs. Wonbang Tech Co | Shinsegae Information vs. Busan Industrial Co | Shinsegae Information vs. Busan Ind |
| Dongwon System vs. Tway Air Co | Dongwon System vs. CU Medical Systems | Dongwon System vs. SK Telecom Co | Dongwon System vs. Ssangyong Information Communication |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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