Correlation Between Shinsung Delta and Seoul Semiconductor
Can any of the company-specific risk be diversified away by investing in both Shinsung Delta and Seoul Semiconductor 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 Seoul Semiconductor 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 Seoul Semiconductor Co, you can compare the effects of market volatilities on Shinsung Delta and Seoul Semiconductor 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 Seoul Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsung Delta and Seoul Semiconductor.
Diversification Opportunities for Shinsung Delta and Seoul Semiconductor
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinsung and Seoul is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Shinsung Delta Tech and Seoul Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Semiconductor 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 Seoul Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Semiconductor has no effect on the direction of Shinsung Delta i.e., Shinsung Delta and Seoul Semiconductor go up and down completely randomly.
Pair Corralation between Shinsung Delta and Seoul Semiconductor
Assuming the 90 days trading horizon Shinsung Delta Tech is expected to generate 2.55 times more return on investment than Seoul Semiconductor. However, Shinsung Delta is 2.55 times more volatile than Seoul Semiconductor Co. It trades about 0.35 of its potential returns per unit of risk. Seoul Semiconductor Co is currently generating about -0.51 per unit of risk. If you would invest 4,315,000 in Shinsung Delta Tech on September 2, 2024 and sell it today you would earn a total of 2,225,000 from holding Shinsung Delta Tech or generate 51.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsung Delta Tech vs. Seoul Semiconductor Co
Performance |
| Timeline |
| Shinsung Delta Tech |
| Seoul Semiconductor |
Shinsung Delta and Seoul Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsung Delta and Seoul Semiconductor
The main advantage of trading using opposite Shinsung Delta and Seoul Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsung Delta position performs unexpectedly, Seoul Semiconductor 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 Seoul Semiconductor will offset losses from the drop in Seoul Semiconductor's long position.| Shinsung Delta vs. Korea New Network | Shinsung Delta vs. ICD Co | Shinsung Delta vs. DYPNF CoLtd | Shinsung Delta vs. Busan Industrial Co |
| Seoul Semiconductor vs. Dongsin Engineering Construction | Seoul Semiconductor vs. Doosan Fuel Cell | Seoul Semiconductor vs. Daishin Balance 1 | Seoul Semiconductor vs. Total Soft Bank |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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