Correlation Between Sungdo Engineering and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both Sungdo Engineering and Shinhan Inverse 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 Shinhan Inverse 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 Shinhan Inverse Silver, you can compare the effects of market volatilities on Sungdo Engineering and Shinhan Inverse 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 Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungdo Engineering and Shinhan Inverse.
Diversification Opportunities for Sungdo Engineering and Shinhan Inverse
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sungdo and Shinhan is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sungdo Engineering Constructio and Shinhan Inverse Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Inverse Silver 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 Shinhan Inverse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinhan Inverse Silver has no effect on the direction of Sungdo Engineering i.e., Sungdo Engineering and Shinhan Inverse go up and down completely randomly.
Pair Corralation between Sungdo Engineering and Shinhan Inverse
Assuming the 90 days trading horizon Sungdo Engineering Construction is expected to generate 1.68 times more return on investment than Shinhan Inverse. However, Sungdo Engineering is 1.68 times more volatile than Shinhan Inverse Silver. It trades about 0.02 of its potential returns per unit of risk. Shinhan Inverse Silver is currently generating about -0.03 per unit of risk. If you would invest 420,000 in Sungdo Engineering Construction on September 3, 2024 and sell it today you would earn a total of 10,000 from holding Sungdo Engineering Construction or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.87% |
| Values | Daily Returns |
Sungdo Engineering Constructio vs. Shinhan Inverse Silver
Performance |
| Timeline |
| Sungdo Engineering |
| Shinhan Inverse Silver |
Sungdo Engineering and Shinhan Inverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungdo Engineering and Shinhan Inverse
The main advantage of trading using opposite Sungdo Engineering and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungdo Engineering position performs unexpectedly, Shinhan Inverse 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 Shinhan Inverse will offset losses from the drop in Shinhan Inverse's long position.| Sungdo Engineering vs. LG Display | Sungdo Engineering vs. Hyundai Motor | Sungdo Engineering vs. Hyundai Motor Co | Sungdo Engineering vs. Hyundai Motor Co |
| Shinhan Inverse vs. Seah Steel Corp | Shinhan Inverse vs. Clean Science co | Shinhan Inverse vs. Netmarble Games Corp | Shinhan Inverse vs. Dongbu Steel 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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