Correlation Between Shin Steel and Pharmicell
Can any of the company-specific risk be diversified away by investing in both Shin Steel and Pharmicell 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 Shin Steel and Pharmicell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shin Steel Co and Pharmicell, you can compare the effects of market volatilities on Shin Steel and Pharmicell 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 Shin Steel with a short position of Pharmicell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Steel and Pharmicell.
Diversification Opportunities for Shin Steel and Pharmicell
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shin and Pharmicell is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Shin Steel Co and Pharmicell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pharmicell and Shin Steel 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 Shin Steel Co are associated (or correlated) with Pharmicell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pharmicell has no effect on the direction of Shin Steel i.e., Shin Steel and Pharmicell go up and down completely randomly.
Pair Corralation between Shin Steel and Pharmicell
Assuming the 90 days trading horizon Shin Steel Co is expected to under-perform the Pharmicell. But the stock apears to be less risky and, when comparing its historical volatility, Shin Steel Co is 1.45 times less risky than Pharmicell. The stock trades about -0.01 of its potential returns per unit of risk. The Pharmicell is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 485,000 in Pharmicell on October 28, 2024 and sell it today you would earn a total of 432,000 from holding Pharmicell or generate 89.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Steel Co vs. Pharmicell
Performance |
| Timeline |
| Shin Steel |
| Pharmicell |
Shin Steel and Pharmicell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Steel and Pharmicell
The main advantage of trading using opposite Shin Steel and Pharmicell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Steel position performs unexpectedly, Pharmicell 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 Pharmicell will offset losses from the drop in Pharmicell's long position.| Shin Steel vs. Camus Engineering Construction | Shin Steel vs. Sejong Telecom | Shin Steel vs. Lotte Data Communication | Shin Steel vs. Samyang Foods Co |
| Pharmicell vs. Hanmi Semiconductor Co | Pharmicell vs. PJ Metal Co | Pharmicell vs. Industrial Bank | Pharmicell vs. Sejong Telecom |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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