Correlation Between Shinsegae Information and Sangshin Electronics
Can any of the company-specific risk be diversified away by investing in both Shinsegae Information and Sangshin Electronics 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 Sangshin Electronics 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 Sangshin Electronics Co, you can compare the effects of market volatilities on Shinsegae Information and Sangshin Electronics 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 Sangshin Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Information and Sangshin Electronics.
Diversification Opportunities for Shinsegae Information and Sangshin Electronics
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shinsegae and Sangshin is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Information Communic and Sangshin Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangshin Electronics 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 Sangshin Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangshin Electronics has no effect on the direction of Shinsegae Information i.e., Shinsegae Information and Sangshin Electronics go up and down completely randomly.
Pair Corralation between Shinsegae Information and Sangshin Electronics
Assuming the 90 days trading horizon Shinsegae Information Communication is expected to under-perform the Sangshin Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Shinsegae Information Communication is 1.4 times less risky than Sangshin Electronics. The stock trades about -0.37 of its potential returns per unit of risk. The Sangshin Electronics Co is currently generating about -0.21 of returns per unit of risk over similar time horizon. If you would invest 330,500 in Sangshin Electronics Co on August 24, 2024 and sell it today you would lose (33,000) from holding Sangshin Electronics Co or give up 9.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shinsegae Information Communic vs. Sangshin Electronics Co
Performance |
| Timeline |
| Shinsegae Information |
| Sangshin Electronics |
Shinsegae Information and Sangshin Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Information and Sangshin Electronics
The main advantage of trading using opposite Shinsegae Information and Sangshin Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Information position performs unexpectedly, Sangshin Electronics 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 Sangshin Electronics will offset losses from the drop in Sangshin Electronics' long position.| Shinsegae Information vs. AptaBio Therapeutics | Shinsegae Information vs. Daewoo SBI SPAC | Shinsegae Information vs. Dream Security co | Shinsegae Information vs. Microfriend |
| Sangshin Electronics vs. Daejoo Electronic Materials | Sangshin Electronics vs. Parksystems Corp | Sangshin Electronics vs. BH Co | Sangshin Electronics vs. Partron 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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