Correlation Between EBEST Investment and Shin Steel
Can any of the company-specific risk be diversified away by investing in both EBEST Investment and Shin Steel 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 EBEST Investment and Shin Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EBEST Investment Securities and Shin Steel Co, you can compare the effects of market volatilities on EBEST Investment and Shin Steel 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 EBEST Investment with a short position of Shin Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and Shin Steel.
Diversification Opportunities for EBEST Investment and Shin Steel
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between EBEST and Shin is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities and Shin Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Steel and EBEST Investment 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 EBEST Investment Securities are associated (or correlated) with Shin Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Steel has no effect on the direction of EBEST Investment i.e., EBEST Investment and Shin Steel go up and down completely randomly.
Pair Corralation between EBEST Investment and Shin Steel
Assuming the 90 days trading horizon EBEST Investment is expected to generate 5.46 times less return on investment than Shin Steel. But when comparing it to its historical volatility, EBEST Investment Securities is 1.16 times less risky than Shin Steel. It trades about 0.02 of its potential returns per unit of risk. Shin Steel Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 234,000 in Shin Steel Co on November 27, 2024 and sell it today you would earn a total of 6,000 from holding Shin Steel Co or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBEST Investment Securities vs. Shin Steel Co
Performance |
| Timeline |
| EBEST Investment Sec |
| Shin Steel |
EBEST Investment and Shin Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBEST Investment and Shin Steel
The main advantage of trading using opposite EBEST Investment and Shin Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBEST Investment position performs unexpectedly, Shin Steel 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 Shin Steel will offset losses from the drop in Shin Steel's long position.| EBEST Investment vs. Namhae Chemical | EBEST Investment vs. Lotte Fine Chemical | EBEST Investment vs. Dongil Metal Co | EBEST Investment vs. Kumho Petro Chemical |
| Shin Steel vs. Korea Computer | Shin Steel vs. Sewoon Medical Co | Shin Steel vs. Industrial Bank | Shin Steel vs. Hyundai 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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