Correlation Between Shinsegae Information and Nice Information
Can any of the company-specific risk be diversified away by investing in both Shinsegae Information and Nice Information 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 Nice Information 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 Nice Information Telecommunication, you can compare the effects of market volatilities on Shinsegae Information and Nice Information 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 Nice Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Information and Nice Information.
Diversification Opportunities for Shinsegae Information and Nice Information
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shinsegae and Nice is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Information Communic and Nice Information Telecommunica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nice Information Tel 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 Nice Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nice Information Tel has no effect on the direction of Shinsegae Information i.e., Shinsegae Information and Nice Information go up and down completely randomly.
Pair Corralation between Shinsegae Information and Nice Information
Assuming the 90 days trading horizon Shinsegae Information Communication is expected to generate 2.95 times more return on investment than Nice Information. However, Shinsegae Information is 2.95 times more volatile than Nice Information Telecommunication. It trades about -0.03 of its potential returns per unit of risk. Nice Information Telecommunication is currently generating about -0.15 per unit of risk. If you would invest 940,000 in Shinsegae Information Communication on August 28, 2024 and sell it today you would lose (31,000) from holding Shinsegae Information Communication or give up 3.3% 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. Nice Information Telecommunica
Performance |
| Timeline |
| Shinsegae Information |
| Nice Information Tel |
Shinsegae Information and Nice Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Information and Nice Information
The main advantage of trading using opposite Shinsegae Information and Nice Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Information position performs unexpectedly, Nice Information 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 Nice Information will offset losses from the drop in Nice Information's long position.| Shinsegae Information vs. AptaBio Therapeutics | Shinsegae Information vs. Daewoo SBI SPAC | Shinsegae Information vs. Dream Security co | Shinsegae Information vs. Microfriend |
| Nice Information vs. Korea Real Estate | Nice Information vs. Korea Ratings Co | Nice Information vs. IQuest Co | Nice Information vs. Wonbang Tech 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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