Correlation Between Korea Information and Shinsegae Information
Can any of the company-specific risk be diversified away by investing in both Korea Information 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 Korea Information and Shinsegae Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Information Engineering and Shinsegae Information Communication, you can compare the effects of market volatilities on Korea Information 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 Korea Information with a short position of Shinsegae Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and Shinsegae Information.
Diversification Opportunities for Korea Information and Shinsegae Information
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Korea and Shinsegae is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Engineering and Shinsegae Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Information and Korea 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 Korea Information Engineering 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 Korea Information i.e., Korea Information and Shinsegae Information go up and down completely randomly.
Pair Corralation between Korea Information and Shinsegae Information
Assuming the 90 days trading horizon Korea Information Engineering is expected to under-perform the Shinsegae Information. But the stock apears to be less risky and, when comparing its historical volatility, Korea Information Engineering is 1.02 times less risky than Shinsegae Information. The stock trades about -0.03 of its potential returns per unit of risk. The Shinsegae Information Communication is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,501,004 in Shinsegae Information Communication on November 19, 2024 and sell it today you would lose (236,004) from holding Shinsegae Information Communication or give up 15.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Information Engineering vs. Shinsegae Information Communic
Performance |
| Timeline |
| Korea Information |
| Shinsegae Information |
Korea Information and Shinsegae Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and Shinsegae Information
The main advantage of trading using opposite Korea Information and Shinsegae Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information 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.| Korea Information vs. Dongil Metal Co | Korea Information vs. PJ Metal Co | Korea Information vs. Golden Bridge Investment | Korea Information vs. Kukil Metal Co |
| Shinsegae Information vs. Hana Technology Co | Shinsegae Information vs. Hotel Shilla Co | Shinsegae Information vs. SM Entertainment Co | Shinsegae Information vs. Cuckoo Homesys 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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