Correlation Between MPLUS Corp and Shin Heung
Can any of the company-specific risk be diversified away by investing in both MPLUS Corp and Shin Heung 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 MPLUS Corp and Shin Heung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between mPLUS Corp and Shin Heung Energy, you can compare the effects of market volatilities on MPLUS Corp and Shin Heung 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 MPLUS Corp with a short position of Shin Heung. Check out your portfolio center. Please also check ongoing floating volatility patterns of MPLUS Corp and Shin Heung.
Diversification Opportunities for MPLUS Corp and Shin Heung
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between MPLUS and Shin is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding mPLUS Corp and Shin Heung Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Heung Energy and MPLUS Corp 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 mPLUS Corp are associated (or correlated) with Shin Heung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Heung Energy has no effect on the direction of MPLUS Corp i.e., MPLUS Corp and Shin Heung go up and down completely randomly.
Pair Corralation between MPLUS Corp and Shin Heung
Assuming the 90 days trading horizon mPLUS Corp is expected to generate 0.77 times more return on investment than Shin Heung. However, mPLUS Corp is 1.29 times less risky than Shin Heung. It trades about -0.39 of its potential returns per unit of risk. Shin Heung Energy is currently generating about -0.35 per unit of risk. If you would invest 971,000 in mPLUS Corp on August 29, 2024 and sell it today you would lose (184,000) from holding mPLUS Corp or give up 18.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
mPLUS Corp vs. Shin Heung Energy
Performance |
| Timeline |
| mPLUS Corp |
| Shin Heung Energy |
MPLUS Corp and Shin Heung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MPLUS Corp and Shin Heung
The main advantage of trading using opposite MPLUS Corp and Shin Heung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MPLUS Corp position performs unexpectedly, Shin Heung 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 Heung will offset losses from the drop in Shin Heung's long position.| MPLUS Corp vs. Korean Reinsurance Co | MPLUS Corp vs. DB Insurance Co | MPLUS Corp vs. Dongbu Insurance Co | MPLUS Corp vs. Hyosung Advanced Materials |
| Shin Heung vs. Ecopro BM Co | Shin Heung vs. Sangsin Energy Display | Shin Heung vs. Bosung Power Technology | Shin Heung vs. APro Co |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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