Correlation Between ECSTELECOM and Shinsung Delta
Can any of the company-specific risk be diversified away by investing in both ECSTELECOM and Shinsung Delta 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 ECSTELECOM and Shinsung Delta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECSTELECOM Co and Shinsung Delta Tech, you can compare the effects of market volatilities on ECSTELECOM and Shinsung Delta 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 ECSTELECOM with a short position of Shinsung Delta. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECSTELECOM and Shinsung Delta.
Diversification Opportunities for ECSTELECOM and Shinsung Delta
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between ECSTELECOM and Shinsung is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding ECSTELECOM Co and Shinsung Delta Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsung Delta Tech and ECSTELECOM 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 ECSTELECOM Co are associated (or correlated) with Shinsung Delta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsung Delta Tech has no effect on the direction of ECSTELECOM i.e., ECSTELECOM and Shinsung Delta go up and down completely randomly.
Pair Corralation between ECSTELECOM and Shinsung Delta
Assuming the 90 days trading horizon ECSTELECOM Co is expected to under-perform the Shinsung Delta. But the stock apears to be less risky and, when comparing its historical volatility, ECSTELECOM Co is 4.95 times less risky than Shinsung Delta. The stock trades about -0.22 of its potential returns per unit of risk. The Shinsung Delta Tech is currently generating about 0.35 of returns per unit of risk over similar time horizon. 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECSTELECOM Co vs. Shinsung Delta Tech
Performance |
| Timeline |
| ECSTELECOM |
| Shinsung Delta Tech |
ECSTELECOM and Shinsung Delta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECSTELECOM and Shinsung Delta
The main advantage of trading using opposite ECSTELECOM and Shinsung Delta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECSTELECOM position performs unexpectedly, Shinsung Delta 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 Shinsung Delta will offset losses from the drop in Shinsung Delta's long position.| ECSTELECOM vs. Busan Industrial Co | ECSTELECOM vs. Busan Ind | ECSTELECOM vs. Mirae Asset Daewoo | ECSTELECOM vs. Finebesteel |
| Shinsung Delta vs. Korea New Network | Shinsung Delta vs. ICD Co | Shinsung Delta vs. DYPNF CoLtd | Shinsung Delta vs. Busan Industrial 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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