Correlation Between Sejong Telecom and Shin Steel
Can any of the company-specific risk be diversified away by investing in both Sejong Telecom and Shin Steel 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 Sejong Telecom and Shin Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sejong Telecom and Shin Steel Co, you can compare the effects of market volatilities on Sejong Telecom and Shin Steel 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 Sejong Telecom with a short position of Shin Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sejong Telecom and Shin Steel.
Diversification Opportunities for Sejong Telecom and Shin Steel
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sejong and Shin is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Sejong Telecom and Shin Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Steel and Sejong Telecom 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 Sejong Telecom are associated (or correlated) with Shin Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Steel has no effect on the direction of Sejong Telecom i.e., Sejong Telecom and Shin Steel go up and down completely randomly.
Pair Corralation between Sejong Telecom and Shin Steel
Assuming the 90 days trading horizon Sejong Telecom is expected to under-perform the Shin Steel. But the stock apears to be less risky and, when comparing its historical volatility, Sejong Telecom is 1.86 times less risky than Shin Steel. The stock trades about -0.18 of its potential returns per unit of risk. The Shin Steel Co is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 260,500 in Shin Steel Co on November 6, 2024 and sell it today you would lose (26,500) from holding Shin Steel Co or give up 10.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sejong Telecom vs. Shin Steel Co
Performance |
| Timeline |
| Sejong Telecom |
| Shin Steel |
Sejong Telecom and Shin Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sejong Telecom and Shin Steel
The main advantage of trading using opposite Sejong Telecom and Shin Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sejong Telecom position performs unexpectedly, Shin Steel 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 Shin Steel will offset losses from the drop in Shin Steel's long position.| Sejong Telecom vs. Sam Chun Dang | Sejong Telecom vs. SAMRYOONG CoLtd | Sejong Telecom vs. BYON Co | Sejong Telecom vs. Sangsangin Co |
| Shin Steel vs. Samyoung Electronics Co | Shin Steel vs. Daiyang Metal Co | Shin Steel vs. Daejoo Electronic Materials | Shin Steel vs. SungMoon Electronics 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |