Correlation Between Shinsung Delta and Daedong Gear
Can any of the company-specific risk be diversified away by investing in both Shinsung Delta and Daedong Gear 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 Shinsung Delta and Daedong Gear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinsung Delta Tech and Daedong Gear Co, you can compare the effects of market volatilities on Shinsung Delta and Daedong Gear 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 Shinsung Delta with a short position of Daedong Gear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsung Delta and Daedong Gear.
Diversification Opportunities for Shinsung Delta and Daedong Gear
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shinsung and Daedong is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Shinsung Delta Tech and Daedong Gear Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daedong Gear and Shinsung Delta 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 Shinsung Delta Tech are associated (or correlated) with Daedong Gear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daedong Gear has no effect on the direction of Shinsung Delta i.e., Shinsung Delta and Daedong Gear go up and down completely randomly.
Pair Corralation between Shinsung Delta and Daedong Gear
Assuming the 90 days trading horizon Shinsung Delta Tech is expected to generate 1.39 times more return on investment than Daedong Gear. However, Shinsung Delta is 1.39 times more volatile than Daedong Gear Co. It trades about 0.1 of its potential returns per unit of risk. Daedong Gear Co is currently generating about 0.06 per unit of risk. If you would invest 833,849 in Shinsung Delta Tech on September 12, 2024 and sell it today you would earn a total of 7,126,151 from holding Shinsung Delta Tech or generate 854.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.59% |
| Values | Daily Returns |
Shinsung Delta Tech vs. Daedong Gear Co
Performance |
| Timeline |
| Shinsung Delta Tech |
| Daedong Gear |
Shinsung Delta and Daedong Gear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsung Delta and Daedong Gear
The main advantage of trading using opposite Shinsung Delta and Daedong Gear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsung Delta position performs unexpectedly, Daedong Gear 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 Daedong Gear will offset losses from the drop in Daedong Gear's long position.| Shinsung Delta vs. Korea New Network | Shinsung Delta vs. Solution Advanced Technology | Shinsung Delta vs. Busan Industrial Co | Shinsung Delta vs. Busan Ind |
| Daedong Gear vs. Innowireless Co | Daedong Gear vs. Shinsung Delta Tech | Daedong Gear vs. Amogreentech Co | Daedong Gear vs. Hwangkum Steel Technology |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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