Correlation Between KT Hitel and Shinsegae Information
Can any of the company-specific risk be diversified away by investing in both KT Hitel and Shinsegae Information 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 KT Hitel and Shinsegae Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KT Hitel and Shinsegae Information Communication, you can compare the effects of market volatilities on KT Hitel and Shinsegae Information 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 KT Hitel with a short position of Shinsegae Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of KT Hitel and Shinsegae Information.
Diversification Opportunities for KT Hitel and Shinsegae Information
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 036030 and Shinsegae is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding KT Hitel and Shinsegae Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Information and KT Hitel 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 KT Hitel are associated (or correlated) with Shinsegae Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Information has no effect on the direction of KT Hitel i.e., KT Hitel and Shinsegae Information go up and down completely randomly.
Pair Corralation between KT Hitel and Shinsegae Information
Assuming the 90 days trading horizon KT Hitel is expected to generate 1.89 times more return on investment than Shinsegae Information. However, KT Hitel is 1.89 times more volatile than Shinsegae Information Communication. It trades about 0.0 of its potential returns per unit of risk. Shinsegae Information Communication is currently generating about -0.04 per unit of risk. If you would invest 384,500 in KT Hitel on September 4, 2024 and sell it today you would lose (7,500) from holding KT Hitel or give up 1.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KT Hitel vs. Shinsegae Information Communic
Performance |
| Timeline |
| KT Hitel |
| Shinsegae Information |
KT Hitel and Shinsegae Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KT Hitel and Shinsegae Information
The main advantage of trading using opposite KT Hitel and Shinsegae Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KT Hitel position performs unexpectedly, Shinsegae Information 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 Shinsegae Information will offset losses from the drop in Shinsegae Information's long position.| KT Hitel vs. Shinsegae Information Communication | KT Hitel vs. Wireless Power Amplifier | KT Hitel vs. Shinhan Inverse Silver | KT Hitel vs. Clean Science co |
| Shinsegae Information vs. DB Financial Investment | Shinsegae Information vs. Shinhan Financial Group | Shinsegae Information vs. Korean Reinsurance Co | Shinsegae Information vs. KakaoBank 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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