Correlation Between Shinsegae Information and Formetal
Can any of the company-specific risk be diversified away by investing in both Shinsegae Information and Formetal 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 Formetal 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 Formetal Co, you can compare the effects of market volatilities on Shinsegae Information and Formetal 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 Formetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Information and Formetal.
Diversification Opportunities for Shinsegae Information and Formetal
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shinsegae and Formetal is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Information Communic and Formetal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formetal 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 Formetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formetal has no effect on the direction of Shinsegae Information i.e., Shinsegae Information and Formetal go up and down completely randomly.
Pair Corralation between Shinsegae Information and Formetal
Assuming the 90 days trading horizon Shinsegae Information is expected to generate 75.98 times less return on investment than Formetal. But when comparing it to its historical volatility, Shinsegae Information Communication is 2.82 times less risky than Formetal. It trades about 0.01 of its potential returns per unit of risk. Formetal Co is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 267,500 in Formetal Co on September 14, 2024 and sell it today you would earn a total of 71,000 from holding Formetal Co or generate 26.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae Information Communic vs. Formetal Co
Performance |
| Timeline |
| Shinsegae Information |
| Formetal |
Shinsegae Information and Formetal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Information and Formetal
The main advantage of trading using opposite Shinsegae Information and Formetal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Information position performs unexpectedly, Formetal 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 Formetal will offset losses from the drop in Formetal's long position.| Shinsegae Information vs. Samsung Electronics Co | Shinsegae Information vs. Samsung Electronics Co | Shinsegae Information vs. SK Hynix | Shinsegae Information vs. POSCO Holdings |
| Formetal vs. Rainbow Robotics | Formetal vs. COWINTECH Co | Formetal vs. CS BEARING CoLtd | Formetal vs. Young Poong Precision |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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