Correlation Between Shinsegae Information and Foodnamoo
Can any of the company-specific risk be diversified away by investing in both Shinsegae Information and Foodnamoo 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 Foodnamoo 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 Foodnamoo, you can compare the effects of market volatilities on Shinsegae Information and Foodnamoo 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 Foodnamoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Information and Foodnamoo.
Diversification Opportunities for Shinsegae Information and Foodnamoo
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shinsegae and Foodnamoo is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Information Communic and Foodnamoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foodnamoo 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 Foodnamoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foodnamoo has no effect on the direction of Shinsegae Information i.e., Shinsegae Information and Foodnamoo go up and down completely randomly.
Pair Corralation between Shinsegae Information and Foodnamoo
Assuming the 90 days trading horizon Shinsegae Information Communication is expected to under-perform the Foodnamoo. But the stock apears to be less risky and, when comparing its historical volatility, Shinsegae Information Communication is 2.09 times less risky than Foodnamoo. The stock trades about -0.36 of its potential returns per unit of risk. The Foodnamoo is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 328,000 in Foodnamoo on September 4, 2024 and sell it today you would lose (31,000) from holding Foodnamoo or give up 9.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae Information Communic vs. Foodnamoo
Performance |
| Timeline |
| Shinsegae Information |
| Foodnamoo |
Shinsegae Information and Foodnamoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Information and Foodnamoo
The main advantage of trading using opposite Shinsegae Information and Foodnamoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Information position performs unexpectedly, Foodnamoo 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 Foodnamoo will offset losses from the drop in Foodnamoo's long position.| Shinsegae Information vs. DB Financial Investment | Shinsegae Information vs. Shinhan Financial Group | Shinsegae Information vs. Korean Reinsurance Co | Shinsegae Information vs. KakaoBank Corp |
| Foodnamoo vs. Playgram Co | Foodnamoo vs. Digital Power Communications | Foodnamoo vs. Shinsegae Information Communication | Foodnamoo vs. Grand Korea Leisure |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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