Correlation Between Shin Steel and Lindeman Asia
Can any of the company-specific risk be diversified away by investing in both Shin Steel and Lindeman Asia 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 Lindeman Asia 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 Lindeman Asia Investment, you can compare the effects of market volatilities on Shin Steel and Lindeman Asia 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 Lindeman Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Steel and Lindeman Asia.
Diversification Opportunities for Shin Steel and Lindeman Asia
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shin and Lindeman is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Shin Steel Co and Lindeman Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindeman Asia Investment 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 Lindeman Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindeman Asia Investment has no effect on the direction of Shin Steel i.e., Shin Steel and Lindeman Asia go up and down completely randomly.
Pair Corralation between Shin Steel and Lindeman Asia
Assuming the 90 days trading horizon Shin Steel is expected to generate 7.43 times less return on investment than Lindeman Asia. But when comparing it to its historical volatility, Shin Steel Co is 4.37 times less risky than Lindeman Asia. It trades about 0.11 of its potential returns per unit of risk. Lindeman Asia Investment is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 407,000 in Lindeman Asia Investment on November 27, 2024 and sell it today you would earn a total of 76,000 from holding Lindeman Asia Investment or generate 18.67% 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. Lindeman Asia Investment
Performance |
| Timeline |
| Shin Steel |
| Lindeman Asia Investment |
Shin Steel and Lindeman Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Steel and Lindeman Asia
The main advantage of trading using opposite Shin Steel and Lindeman Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Steel position performs unexpectedly, Lindeman Asia 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 Lindeman Asia will offset losses from the drop in Lindeman Asia's long position.| Shin Steel vs. Korea Computer | Shin Steel vs. Sewoon Medical Co | Shin Steel vs. Industrial Bank | Shin Steel vs. Hyundai Industrial Co |
| Lindeman Asia vs. Nh Investment And | Lindeman Asia vs. Hanwha InvestmentSecurities Co | Lindeman Asia vs. Company K Partners | Lindeman Asia vs. FnGuide |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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