Correlation Between Shinsegae Information and Hana Materials
Can any of the company-specific risk be diversified away by investing in both Shinsegae Information and Hana Materials 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 Hana Materials 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 Hana Materials, you can compare the effects of market volatilities on Shinsegae Information and Hana Materials 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 Hana Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Information and Hana Materials.
Diversification Opportunities for Shinsegae Information and Hana Materials
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinsegae and Hana is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Information Communic and Hana Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Materials 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 Hana Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Materials has no effect on the direction of Shinsegae Information i.e., Shinsegae Information and Hana Materials go up and down completely randomly.
Pair Corralation between Shinsegae Information and Hana Materials
Assuming the 90 days trading horizon Shinsegae Information Communication is expected to generate 0.67 times more return on investment than Hana Materials. However, Shinsegae Information Communication is 1.49 times less risky than Hana Materials. It trades about -0.34 of its potential returns per unit of risk. Hana Materials is currently generating about -0.57 per unit of risk. If you would invest 989,000 in Shinsegae Information Communication on September 3, 2024 and sell it today you would lose (100,000) from holding Shinsegae Information Communication or give up 10.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae Information Communic vs. Hana Materials
Performance |
| Timeline |
| Shinsegae Information |
| Hana Materials |
Shinsegae Information and Hana Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Information and Hana Materials
The main advantage of trading using opposite Shinsegae Information and Hana Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Information position performs unexpectedly, Hana Materials 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 Hana Materials will offset losses from the drop in Hana Materials' long position.| Shinsegae Information vs. Sangsangin Investment Securities | Shinsegae Information vs. NH Investment Securities | Shinsegae Information vs. GS Retail Co | Shinsegae Information vs. DB Financial Investment |
| Hana Materials vs. Orbitech Co | Hana Materials vs. CU Tech Corp | Hana Materials vs. Konan Technology | Hana Materials vs. Intellian Technologies |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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