Correlation Between Spolytech and Shinsegae
Can any of the company-specific risk be diversified away by investing in both Spolytech and Shinsegae 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 Spolytech and Shinsegae into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spolytech Co and Shinsegae, you can compare the effects of market volatilities on Spolytech and Shinsegae 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 Spolytech with a short position of Shinsegae. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spolytech and Shinsegae.
Diversification Opportunities for Spolytech and Shinsegae
Almost no diversification
The 3 months correlation between Spolytech and Shinsegae is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Spolytech Co and Shinsegae in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae and Spolytech 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 Spolytech Co are associated (or correlated) with Shinsegae. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae has no effect on the direction of Spolytech i.e., Spolytech and Shinsegae go up and down completely randomly.
Pair Corralation between Spolytech and Shinsegae
Assuming the 90 days trading horizon Spolytech Co is expected to under-perform the Shinsegae. In addition to that, Spolytech is 1.23 times more volatile than Shinsegae. It trades about -0.04 of its total potential returns per unit of risk. Shinsegae is currently generating about -0.04 per unit of volatility. If you would invest 20,932,800 in Shinsegae on September 13, 2024 and sell it today you would lose (7,522,800) from holding Shinsegae or give up 35.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Spolytech Co vs. Shinsegae
Performance |
| Timeline |
| Spolytech |
| Shinsegae |
Spolytech and Shinsegae Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spolytech and Shinsegae
The main advantage of trading using opposite Spolytech and Shinsegae positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spolytech position performs unexpectedly, Shinsegae 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 will offset losses from the drop in Shinsegae's long position.| Spolytech vs. Dongil Metal Co | Spolytech vs. SS TECH | Spolytech vs. Seoyon Topmetal Co | Spolytech vs. A Tech Solution Co |
| Shinsegae vs. CU Tech Corp | Shinsegae vs. Spolytech Co | Shinsegae vs. Daesung Hi Tech Co | Shinsegae vs. Automobile Pc |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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