Correlation Between Shinsegae Information and Danal
Can any of the company-specific risk be diversified away by investing in both Shinsegae Information and Danal 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 Danal 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 Danal Co, you can compare the effects of market volatilities on Shinsegae Information and Danal 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 Danal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Information and Danal.
Diversification Opportunities for Shinsegae Information and Danal
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shinsegae and Danal is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Information Communic and Danal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danal 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 Danal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danal has no effect on the direction of Shinsegae Information i.e., Shinsegae Information and Danal go up and down completely randomly.
Pair Corralation between Shinsegae Information and Danal
Assuming the 90 days trading horizon Shinsegae Information Communication is expected to generate 0.62 times more return on investment than Danal. However, Shinsegae Information Communication is 1.62 times less risky than Danal. It trades about -0.07 of its potential returns per unit of risk. Danal Co is currently generating about -0.06 per unit of risk. If you would invest 1,180,403 in Shinsegae Information Communication on September 4, 2024 and sell it today you would lose (301,403) from holding Shinsegae Information Communication or give up 25.53% 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. Danal Co
Performance |
| Timeline |
| Shinsegae Information |
| Danal |
Shinsegae Information and Danal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Information and Danal
The main advantage of trading using opposite Shinsegae Information and Danal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Information position performs unexpectedly, Danal 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 Danal will offset losses from the drop in Danal's long position.| Shinsegae Information vs. DB Financial Investment | Shinsegae Information vs. Shinhan Financial Group | Shinsegae Information vs. Korean Reinsurance Co | Shinsegae Information vs. KakaoBank Corp |
| Danal vs. Hannong Chemicals | Danal vs. Coloray International Investment | Danal vs. Chin Yang Chemical | Danal vs. Hanwha InvestmentSecurities 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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