Correlation Between Cheryong Industrial and Shinsegae Information
Can any of the company-specific risk be diversified away by investing in both Cheryong Industrial and Shinsegae Information 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 Cheryong Industrial and Shinsegae Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheryong Industrial CoLtd and Shinsegae Information Communication, you can compare the effects of market volatilities on Cheryong Industrial and Shinsegae Information 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 Cheryong Industrial with a short position of Shinsegae Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheryong Industrial and Shinsegae Information.
Diversification Opportunities for Cheryong Industrial and Shinsegae Information
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cheryong and Shinsegae is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Cheryong Industrial CoLtd and Shinsegae Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Information and Cheryong Industrial 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 Cheryong Industrial CoLtd are associated (or correlated) with Shinsegae Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Information has no effect on the direction of Cheryong Industrial i.e., Cheryong Industrial and Shinsegae Information go up and down completely randomly.
Pair Corralation between Cheryong Industrial and Shinsegae Information
Assuming the 90 days trading horizon Cheryong Industrial CoLtd is expected to under-perform the Shinsegae Information. In addition to that, Cheryong Industrial is 2.49 times more volatile than Shinsegae Information Communication. It trades about -0.16 of its total potential returns per unit of risk. Shinsegae Information Communication is currently generating about -0.3 per unit of volatility. If you would invest 981,000 in Shinsegae Information Communication on September 2, 2024 and sell it today you would lose (92,000) from holding Shinsegae Information Communication or give up 9.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cheryong Industrial CoLtd vs. Shinsegae Information Communic
Performance |
| Timeline |
| Cheryong Industrial CoLtd |
| Shinsegae Information |
Cheryong Industrial and Shinsegae Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheryong Industrial and Shinsegae Information
The main advantage of trading using opposite Cheryong Industrial and Shinsegae Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheryong Industrial position performs unexpectedly, Shinsegae Information 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 Information will offset losses from the drop in Shinsegae Information's long position.| Cheryong Industrial vs. Nature and Environment | Cheryong Industrial vs. Busan Industrial Co | Cheryong Industrial vs. Busan Ind | Cheryong Industrial vs. Mirae Asset Daewoo |
| Shinsegae Information vs. AptaBio Therapeutics | Shinsegae Information vs. Daewoo SBI SPAC | Shinsegae Information vs. Dream Security co | Shinsegae Information vs. Microfriend |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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