Correlation Between INFINITT Healthcare and Shinsegae Engineering
Can any of the company-specific risk be diversified away by investing in both INFINITT Healthcare and Shinsegae Engineering 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 INFINITT Healthcare and Shinsegae Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INFINITT Healthcare Co and Shinsegae Engineering Construction, you can compare the effects of market volatilities on INFINITT Healthcare and Shinsegae Engineering 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 INFINITT Healthcare with a short position of Shinsegae Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of INFINITT Healthcare and Shinsegae Engineering.
Diversification Opportunities for INFINITT Healthcare and Shinsegae Engineering
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INFINITT and Shinsegae is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding INFINITT Healthcare Co and Shinsegae Engineering Construc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Engineering and INFINITT Healthcare 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 INFINITT Healthcare Co are associated (or correlated) with Shinsegae Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Engineering has no effect on the direction of INFINITT Healthcare i.e., INFINITT Healthcare and Shinsegae Engineering go up and down completely randomly.
Pair Corralation between INFINITT Healthcare and Shinsegae Engineering
Assuming the 90 days trading horizon INFINITT Healthcare Co is expected to generate 17.75 times more return on investment than Shinsegae Engineering. However, INFINITT Healthcare is 17.75 times more volatile than Shinsegae Engineering Construction. It trades about 0.24 of its potential returns per unit of risk. Shinsegae Engineering Construction is currently generating about 0.27 per unit of risk. If you would invest 415,000 in INFINITT Healthcare Co on November 1, 2024 and sell it today you would earn a total of 18,000 from holding INFINITT Healthcare Co or generate 4.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INFINITT Healthcare Co vs. Shinsegae Engineering Construc
Performance |
| Timeline |
| INFINITT Healthcare |
| Shinsegae Engineering |
INFINITT Healthcare and Shinsegae Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INFINITT Healthcare and Shinsegae Engineering
The main advantage of trading using opposite INFINITT Healthcare and Shinsegae Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INFINITT Healthcare position performs unexpectedly, Shinsegae Engineering 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 Shinsegae Engineering will offset losses from the drop in Shinsegae Engineering's long position.| INFINITT Healthcare vs. Tamul Multimedia Co | INFINITT Healthcare vs. SAMG Entertainment Co | INFINITT Healthcare vs. Yura Tech Co | INFINITT Healthcare vs. SKONEC Entertainment Co |
| Shinsegae Engineering vs. KB Financial Group | Shinsegae Engineering vs. Shinhan Financial Group | Shinsegae Engineering vs. Hana Financial | Shinsegae Engineering vs. Woori Financial Group |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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