Correlation Between Sungdo Engineering and Shinsegae Engineering
Can any of the company-specific risk be diversified away by investing in both Sungdo Engineering and Shinsegae Engineering 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 Sungdo Engineering and Shinsegae Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungdo Engineering Construction and Shinsegae Engineering Construction, you can compare the effects of market volatilities on Sungdo Engineering and Shinsegae Engineering 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 Sungdo Engineering with a short position of Shinsegae Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungdo Engineering and Shinsegae Engineering.
Diversification Opportunities for Sungdo Engineering and Shinsegae Engineering
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sungdo and Shinsegae is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sungdo Engineering Constructio and Shinsegae Engineering Construc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Engineering and Sungdo Engineering 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 Sungdo Engineering Construction are associated (or correlated) with Shinsegae Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Engineering has no effect on the direction of Sungdo Engineering i.e., Sungdo Engineering and Shinsegae Engineering go up and down completely randomly.
Pair Corralation between Sungdo Engineering and Shinsegae Engineering
Assuming the 90 days trading horizon Sungdo Engineering is expected to generate 3.77 times less return on investment than Shinsegae Engineering. But when comparing it to its historical volatility, Sungdo Engineering Construction is 1.13 times less risky than Shinsegae Engineering. It trades about 0.01 of its potential returns per unit of risk. Shinsegae Engineering Construction is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,701,256 in Shinsegae Engineering Construction on September 5, 2024 and sell it today you would earn a total of 102,744 from holding Shinsegae Engineering Construction or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Sungdo Engineering Constructio vs. Shinsegae Engineering Construc
Performance |
| Timeline |
| Sungdo Engineering |
| Shinsegae Engineering |
Sungdo Engineering and Shinsegae Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungdo Engineering and Shinsegae Engineering
The main advantage of trading using opposite Sungdo Engineering and Shinsegae Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungdo Engineering position performs unexpectedly, Shinsegae Engineering 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 Engineering will offset losses from the drop in Shinsegae Engineering's long position.| Sungdo Engineering vs. JYP Entertainment Corp | Sungdo Engineering vs. Next Entertainment World | Sungdo Engineering vs. Cube Entertainment | Sungdo Engineering vs. Korea Petro Chemical |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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