Correlation Between Shinsegae Information and Korea Computer
Can any of the company-specific risk be diversified away by investing in both Shinsegae Information and Korea Computer 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 Korea Computer 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 Korea Computer, you can compare the effects of market volatilities on Shinsegae Information and Korea Computer 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 Korea Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Information and Korea Computer.
Diversification Opportunities for Shinsegae Information and Korea Computer
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shinsegae and Korea is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Information Communic and Korea Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Computer 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 Korea Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Computer has no effect on the direction of Shinsegae Information i.e., Shinsegae Information and Korea Computer go up and down completely randomly.
Pair Corralation between Shinsegae Information and Korea Computer
Assuming the 90 days trading horizon Shinsegae Information Communication is expected to under-perform the Korea Computer. But the stock apears to be less risky and, when comparing its historical volatility, Shinsegae Information Communication is 1.36 times less risky than Korea Computer. The stock trades about -0.01 of its potential returns per unit of risk. The Korea Computer is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 380,104 in Korea Computer on September 24, 2024 and sell it today you would earn a total of 139,896 from holding Korea Computer or generate 36.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae Information Communic vs. Korea Computer
Performance |
| Timeline |
| Shinsegae Information |
| Korea Computer |
Shinsegae Information and Korea Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Information and Korea Computer
The main advantage of trading using opposite Shinsegae Information and Korea Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Information position performs unexpectedly, Korea Computer 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 Korea Computer will offset losses from the drop in Korea Computer'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 |
| Korea Computer vs. Korean Reinsurance Co | Korea Computer vs. Shinsegae Information Communication | Korea Computer vs. ITM Semiconductor Co | Korea Computer vs. ABOV Semiconductor 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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