Correlation Between Shinsegae Information and Choil Aluminum
Can any of the company-specific risk be diversified away by investing in both Shinsegae Information and Choil Aluminum 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 Choil Aluminum 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 Choil Aluminum, you can compare the effects of market volatilities on Shinsegae Information and Choil Aluminum 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 Choil Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Information and Choil Aluminum.
Diversification Opportunities for Shinsegae Information and Choil Aluminum
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shinsegae and Choil is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Information Communic and Choil Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choil Aluminum 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 Choil Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choil Aluminum has no effect on the direction of Shinsegae Information i.e., Shinsegae Information and Choil Aluminum go up and down completely randomly.
Pair Corralation between Shinsegae Information and Choil Aluminum
Assuming the 90 days trading horizon Shinsegae Information Communication is expected to under-perform the Choil Aluminum. But the stock apears to be less risky and, when comparing its historical volatility, Shinsegae Information Communication is 2.01 times less risky than Choil Aluminum. The stock trades about -0.03 of its potential returns per unit of risk. The Choil Aluminum is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 142,800 in Choil Aluminum on September 16, 2024 and sell it today you would earn a total of 200.00 from holding Choil Aluminum or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae Information Communic vs. Choil Aluminum
Performance |
| Timeline |
| Shinsegae Information |
| Choil Aluminum |
Shinsegae Information and Choil Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Information and Choil Aluminum
The main advantage of trading using opposite Shinsegae Information and Choil Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Information position performs unexpectedly, Choil Aluminum 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 Choil Aluminum will offset losses from the drop in Choil Aluminum'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 |
| Choil Aluminum vs. Nable Communications | Choil Aluminum vs. Polaris Office Corp | Choil Aluminum vs. Shinsegae Information Communication | Choil Aluminum vs. KT Submarine Telecom |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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