Correlation Between Shinsegae Information and Daedong Metals
Can any of the company-specific risk be diversified away by investing in both Shinsegae Information and Daedong Metals 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 Daedong Metals 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 Daedong Metals Co, you can compare the effects of market volatilities on Shinsegae Information and Daedong Metals 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 Daedong Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Information and Daedong Metals.
Diversification Opportunities for Shinsegae Information and Daedong Metals
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinsegae and Daedong is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Information Communic and Daedong Metals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daedong Metals 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 Daedong Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daedong Metals has no effect on the direction of Shinsegae Information i.e., Shinsegae Information and Daedong Metals go up and down completely randomly.
Pair Corralation between Shinsegae Information and Daedong Metals
Assuming the 90 days trading horizon Shinsegae Information Communication is expected to under-perform the Daedong Metals. But the stock apears to be less risky and, when comparing its historical volatility, Shinsegae Information Communication is 4.5 times less risky than Daedong Metals. The stock trades about -0.23 of its potential returns per unit of risk. The Daedong Metals Co is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 613,000 in Daedong Metals Co on September 12, 2024 and sell it today you would earn a total of 130,000 from holding Daedong Metals Co or generate 21.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae Information Communic vs. Daedong Metals Co
Performance |
| Timeline |
| Shinsegae Information |
| Daedong Metals |
Shinsegae Information and Daedong Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Information and Daedong Metals
The main advantage of trading using opposite Shinsegae Information and Daedong Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Information position performs unexpectedly, Daedong Metals 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 Daedong Metals will offset losses from the drop in Daedong Metals' long position.| Shinsegae Information vs. Samsung Electronics Co | Shinsegae Information vs. Samsung Electronics Co | Shinsegae Information vs. SK Hynix | Shinsegae Information vs. POSCO Holdings |
| Daedong Metals vs. Ecocab Co | Daedong Metals vs. Daedong Gear Co | Daedong Metals vs. Solution Advanced Technology | Daedong Metals vs. Busan Industrial Co |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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