Correlation Between Echomarketing CoLtd and Shin Steel
Can any of the company-specific risk be diversified away by investing in both Echomarketing CoLtd and Shin Steel 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 Echomarketing CoLtd and Shin Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Echomarketing CoLtd and Shin Steel Co, you can compare the effects of market volatilities on Echomarketing CoLtd and Shin Steel 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 Echomarketing CoLtd with a short position of Shin Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Echomarketing CoLtd and Shin Steel.
Diversification Opportunities for Echomarketing CoLtd and Shin Steel
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Echomarketing and Shin is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Echomarketing CoLtd and Shin Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Steel and Echomarketing CoLtd 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 Echomarketing CoLtd are associated (or correlated) with Shin Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Steel has no effect on the direction of Echomarketing CoLtd i.e., Echomarketing CoLtd and Shin Steel go up and down completely randomly.
Pair Corralation between Echomarketing CoLtd and Shin Steel
Assuming the 90 days trading horizon Echomarketing CoLtd is expected to generate 8.71 times less return on investment than Shin Steel. But when comparing it to its historical volatility, Echomarketing CoLtd is 1.73 times less risky than Shin Steel. It trades about 0.04 of its potential returns per unit of risk. Shin Steel Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 221,500 in Shin Steel Co on October 11, 2024 and sell it today you would earn a total of 25,500 from holding Shin Steel Co or generate 11.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Echomarketing CoLtd vs. Shin Steel Co
Performance |
| Timeline |
| Echomarketing CoLtd |
| Shin Steel |
Echomarketing CoLtd and Shin Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Echomarketing CoLtd and Shin Steel
The main advantage of trading using opposite Echomarketing CoLtd and Shin Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Echomarketing CoLtd position performs unexpectedly, Shin Steel 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 Shin Steel will offset losses from the drop in Shin Steel's long position.| Echomarketing CoLtd vs. AfreecaTV Co | Echomarketing CoLtd vs. Seegene | Echomarketing CoLtd vs. SS TECH | Echomarketing CoLtd vs. Ezwelfare Co |
| Shin Steel vs. HB Technology TD | Shin Steel vs. Ilji Technology Co | Shin Steel vs. NewFlex Technology Co | Shin Steel vs. Aprogen Healthcare Games |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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