Correlation Between Shinsung Delta and Automobile
Can any of the company-specific risk be diversified away by investing in both Shinsung Delta and Automobile 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 Automobile 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 Automobile Pc, you can compare the effects of market volatilities on Shinsung Delta and Automobile 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 Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsung Delta and Automobile.
Diversification Opportunities for Shinsung Delta and Automobile
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Shinsung and Automobile is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Shinsung Delta Tech and Automobile Pc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automobile Pc 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 Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automobile Pc has no effect on the direction of Shinsung Delta i.e., Shinsung Delta and Automobile go up and down completely randomly.
Pair Corralation between Shinsung Delta and Automobile
Assuming the 90 days trading horizon Shinsung Delta Tech is expected to under-perform the Automobile. In addition to that, Shinsung Delta is 1.41 times more volatile than Automobile Pc. It trades about -0.07 of its total potential returns per unit of risk. Automobile Pc is currently generating about -0.08 per unit of volatility. If you would invest 119,300 in Automobile Pc on August 27, 2024 and sell it today you would lose (51,100) from holding Automobile Pc or give up 42.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsung Delta Tech vs. Automobile Pc
Performance |
| Timeline |
| Shinsung Delta Tech |
| Automobile Pc |
Shinsung Delta and Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsung Delta and Automobile
The main advantage of trading using opposite Shinsung Delta and Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsung Delta position performs unexpectedly, Automobile 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 Automobile will offset losses from the drop in Automobile's long position.| Shinsung Delta vs. Samsung Electronics Co | Shinsung Delta vs. Samsung Electronics Co | Shinsung Delta vs. Hyundai Motor Co | Shinsung Delta vs. Hyundai Motor |
| Automobile vs. Busan Industrial Co | Automobile vs. Busan Ind | Automobile vs. Mirae Asset Daewoo | Automobile vs. UNISEM 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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