Correlation Between Shinsegae Information and Hyosung Chemical
Can any of the company-specific risk be diversified away by investing in both Shinsegae Information and Hyosung Chemical 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 Hyosung Chemical 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 Hyosung Chemical Corp, you can compare the effects of market volatilities on Shinsegae Information and Hyosung Chemical 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 Hyosung Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Information and Hyosung Chemical.
Diversification Opportunities for Shinsegae Information and Hyosung Chemical
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shinsegae and Hyosung is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Information Communic and Hyosung Chemical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyosung Chemical Corp 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 Hyosung Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyosung Chemical Corp has no effect on the direction of Shinsegae Information i.e., Shinsegae Information and Hyosung Chemical go up and down completely randomly.
Pair Corralation between Shinsegae Information and Hyosung Chemical
Assuming the 90 days trading horizon Shinsegae Information Communication is expected to generate 0.6 times more return on investment than Hyosung Chemical. However, Shinsegae Information Communication is 1.66 times less risky than Hyosung Chemical. It trades about -0.04 of its potential returns per unit of risk. Hyosung Chemical Corp is currently generating about -0.13 per unit of risk. If you would invest 1,103,629 in Shinsegae Information Communication on August 25, 2024 and sell it today you would lose (217,629) from holding Shinsegae Information Communication or give up 19.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae Information Communic vs. Hyosung Chemical Corp
Performance |
| Timeline |
| Shinsegae Information |
| Hyosung Chemical Corp |
Shinsegae Information and Hyosung Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Information and Hyosung Chemical
The main advantage of trading using opposite Shinsegae Information and Hyosung Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Information position performs unexpectedly, Hyosung Chemical 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 Hyosung Chemical will offset losses from the drop in Hyosung Chemical's long position.| Shinsegae Information vs. Hyosung Advanced Materials | Shinsegae Information vs. Iljin Materials Co | Shinsegae Information vs. Seoyon Topmetal Co | Shinsegae Information vs. Top Material Co |
| Hyosung Chemical vs. Shinsegae Information Communication | Hyosung Chemical vs. PH Tech Co | Hyosung Chemical vs. CU Tech Corp | Hyosung Chemical vs. Jeju Semiconductor Corp |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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