Correlation Between Shinsung Delta and Hugel

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Can any of the company-specific risk be diversified away by investing in both Shinsung Delta and Hugel 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 Hugel 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 Hugel Inc, you can compare the effects of market volatilities on Shinsung Delta and Hugel 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 Hugel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsung Delta and Hugel.

Diversification Opportunities for Shinsung Delta and Hugel

-0.09
  Correlation Coefficient

Good diversification

The 3 months correlation between Shinsung and Hugel is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Shinsung Delta Tech and Hugel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hugel Inc 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 Hugel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hugel Inc has no effect on the direction of Shinsung Delta i.e., Shinsung Delta and Hugel go up and down completely randomly.

Pair Corralation between Shinsung Delta and Hugel

Assuming the 90 days trading horizon Shinsung Delta Tech is expected to generate 2.13 times more return on investment than Hugel. However, Shinsung Delta is 2.13 times more volatile than Hugel Inc. It trades about 0.1 of its potential returns per unit of risk. Hugel Inc 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 Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.59%
ValuesDaily Returns

Shinsung Delta Tech  vs.  Hugel Inc

 Performance 
       Timeline  
Shinsung Delta Tech 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Shinsung Delta Tech are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shinsung Delta sustained solid returns over the last few months and may actually be approaching a breakup point.
Hugel Inc 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Hugel Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hugel may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Shinsung Delta and Hugel Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Shinsung Delta and Hugel

The main advantage of trading using opposite Shinsung Delta and Hugel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsung Delta position performs unexpectedly, Hugel 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 Hugel will offset losses from the drop in Hugel's long position.
The idea behind Shinsung Delta Tech and Hugel Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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