Correlation Between Seoam Machinery and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both Seoam Machinery and Shinhan Inverse 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 Seoam Machinery and Shinhan Inverse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seoam Machinery Industry and Shinhan Inverse Silver, you can compare the effects of market volatilities on Seoam Machinery and Shinhan Inverse 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 Seoam Machinery with a short position of Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoam Machinery and Shinhan Inverse.
Diversification Opportunities for Seoam Machinery and Shinhan Inverse
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Seoam and Shinhan is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Seoam Machinery Industry and Shinhan Inverse Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Inverse Silver and Seoam Machinery 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 Seoam Machinery Industry are associated (or correlated) with Shinhan Inverse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinhan Inverse Silver has no effect on the direction of Seoam Machinery i.e., Seoam Machinery and Shinhan Inverse go up and down completely randomly.
Pair Corralation between Seoam Machinery and Shinhan Inverse
Assuming the 90 days trading horizon Seoam Machinery is expected to generate 2.11 times less return on investment than Shinhan Inverse. In addition to that, Seoam Machinery is 1.37 times more volatile than Shinhan Inverse Silver. It trades about 0.07 of its total potential returns per unit of risk. Shinhan Inverse Silver is currently generating about 0.21 per unit of volatility. If you would invest 325,500 in Shinhan Inverse Silver on August 27, 2024 and sell it today you would earn a total of 26,500 from holding Shinhan Inverse Silver or generate 8.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoam Machinery Industry vs. Shinhan Inverse Silver
Performance |
| Timeline |
| Seoam Machinery Industry |
| Shinhan Inverse Silver |
Seoam Machinery and Shinhan Inverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoam Machinery and Shinhan Inverse
The main advantage of trading using opposite Seoam Machinery and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoam Machinery position performs unexpectedly, Shinhan Inverse 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 Shinhan Inverse will offset losses from the drop in Shinhan Inverse's long position.| Seoam Machinery vs. Korea Information Communications | Seoam Machinery vs. Organic Special Pet | Seoam Machinery vs. Lotte Data Communication | Seoam Machinery vs. Nice Information Telecommunication |
| Shinhan Inverse vs. Sangsin Energy Display | Shinhan Inverse vs. LG Display Co | Shinhan Inverse vs. Sunny Electronics Corp | Shinhan Inverse vs. Samji Electronics 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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