Correlation Between Shin Steel and Incar Financial
Can any of the company-specific risk be diversified away by investing in both Shin Steel and Incar Financial 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 Incar Financial 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 Incar Financial Service, you can compare the effects of market volatilities on Shin Steel and Incar Financial 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 Incar Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Steel and Incar Financial.
Diversification Opportunities for Shin Steel and Incar Financial
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shin and Incar is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Shin Steel Co and Incar Financial Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Incar Financial Service 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 Incar Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Incar Financial Service has no effect on the direction of Shin Steel i.e., Shin Steel and Incar Financial go up and down completely randomly.
Pair Corralation between Shin Steel and Incar Financial
Assuming the 90 days trading horizon Shin Steel Co is expected to generate 1.05 times more return on investment than Incar Financial. However, Shin Steel is 1.05 times more volatile than Incar Financial Service. It trades about 0.22 of its potential returns per unit of risk. Incar Financial Service is currently generating about -0.25 per unit of risk. If you would invest 231,000 in Shin Steel Co on October 13, 2024 and sell it today you would earn a total of 25,500 from holding Shin Steel Co or generate 11.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Shin Steel Co vs. Incar Financial Service
Performance |
| Timeline |
| Shin Steel |
| Incar Financial Service |
Shin Steel and Incar Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Steel and Incar Financial
The main advantage of trading using opposite Shin Steel and Incar Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Steel position performs unexpectedly, Incar Financial 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 Incar Financial will offset losses from the drop in Incar Financial's long position.| Shin Steel vs. Ecoplastic | Shin Steel vs. Heungkuk Metaltech CoLtd | Shin Steel vs. Dongil Metal Co | Shin Steel vs. Youngsin Metal Industrial |
| Incar Financial vs. PlayD Co | Incar Financial vs. Korea Air Svc | Incar Financial vs. SEOJEON ELECTRIC MACHINERY | Incar Financial vs. Iljin Display |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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