Correlation Between Shinsegae Information and CU Medical
Can any of the company-specific risk be diversified away by investing in both Shinsegae Information and CU Medical 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 CU Medical 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 CU Medical Systems, you can compare the effects of market volatilities on Shinsegae Information and CU Medical 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 CU Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Information and CU Medical.
Diversification Opportunities for Shinsegae Information and CU Medical
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shinsegae and 115480 is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Information Communic and CU Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CU Medical Systems 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 CU Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CU Medical Systems has no effect on the direction of Shinsegae Information i.e., Shinsegae Information and CU Medical go up and down completely randomly.
Pair Corralation between Shinsegae Information and CU Medical
Assuming the 90 days trading horizon Shinsegae Information Communication is expected to under-perform the CU Medical. But the stock apears to be less risky and, when comparing its historical volatility, Shinsegae Information Communication is 1.16 times less risky than CU Medical. The stock trades about -0.09 of its potential returns per unit of risk. The CU Medical Systems is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 74,600 in CU Medical Systems on September 1, 2024 and sell it today you would lose (9,100) from holding CU Medical Systems or give up 12.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae Information Communic vs. CU Medical Systems
Performance |
| Timeline |
| Shinsegae Information |
| CU Medical Systems |
Shinsegae Information and CU Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Information and CU Medical
The main advantage of trading using opposite Shinsegae Information and CU Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Information position performs unexpectedly, CU Medical 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 CU Medical will offset losses from the drop in CU Medical's long position.| Shinsegae Information vs. AptaBio Therapeutics | Shinsegae Information vs. Daewoo SBI SPAC | Shinsegae Information vs. Dream Security co | Shinsegae Information vs. Microfriend |
| CU Medical vs. AptaBio Therapeutics | CU Medical vs. KT Hitel | CU Medical vs. SillaJen | CU Medical vs. Cytogen |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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