Correlation Between Shinsegae Information and Dong A
Can any of the company-specific risk be diversified away by investing in both Shinsegae Information and Dong A 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 Dong A 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 Dong A Eltek, you can compare the effects of market volatilities on Shinsegae Information and Dong A 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 Dong A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Information and Dong A.
Diversification Opportunities for Shinsegae Information and Dong A
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shinsegae and Dong is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Information Communic and Dong A Eltek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong A Eltek 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 Dong A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong A Eltek has no effect on the direction of Shinsegae Information i.e., Shinsegae Information and Dong A go up and down completely randomly.
Pair Corralation between Shinsegae Information and Dong A
Assuming the 90 days trading horizon Shinsegae Information Communication is expected to under-perform the Dong A. But the stock apears to be less risky and, when comparing its historical volatility, Shinsegae Information Communication is 2.06 times less risky than Dong A. The stock trades about -0.05 of its potential returns per unit of risk. The Dong A Eltek is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 320,931 in Dong A Eltek on August 30, 2024 and sell it today you would earn a total of 114,069 from holding Dong A Eltek or generate 35.54% 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. Dong A Eltek
Performance |
| Timeline |
| Shinsegae Information |
| Dong A Eltek |
Shinsegae Information and Dong A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Information and Dong A
The main advantage of trading using opposite Shinsegae Information and Dong A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Information position performs unexpectedly, Dong A 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 Dong A will offset losses from the drop in Dong A's long position.| Shinsegae Information vs. AptaBio Therapeutics | Shinsegae Information vs. Daewoo SBI SPAC | Shinsegae Information vs. Dream Security co | Shinsegae Information vs. Microfriend |
| Dong A vs. DataSolution | Dong A vs. Lotte Data Communication | Dong A vs. Hankuk Steel Wire | Dong A vs. Shinsegae Information Communication |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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