Correlation Between INNOX Advanced and Shinsegae Information
Can any of the company-specific risk be diversified away by investing in both INNOX Advanced and Shinsegae Information 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 INNOX Advanced and Shinsegae Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INNOX Advanced Materials and Shinsegae Information Communication, you can compare the effects of market volatilities on INNOX Advanced and Shinsegae Information 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 INNOX Advanced with a short position of Shinsegae Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of INNOX Advanced and Shinsegae Information.
Diversification Opportunities for INNOX Advanced and Shinsegae Information
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between INNOX and Shinsegae is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding INNOX Advanced Materials and Shinsegae Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Information and INNOX Advanced 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 INNOX Advanced Materials are associated (or correlated) with Shinsegae Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Information has no effect on the direction of INNOX Advanced i.e., INNOX Advanced and Shinsegae Information go up and down completely randomly.
Pair Corralation between INNOX Advanced and Shinsegae Information
Assuming the 90 days trading horizon INNOX Advanced Materials is expected to under-perform the Shinsegae Information. In addition to that, INNOX Advanced is 1.47 times more volatile than Shinsegae Information Communication. It trades about -0.05 of its total potential returns per unit of risk. Shinsegae Information Communication is currently generating about -0.06 per unit of volatility. If you would invest 1,166,008 in Shinsegae Information Communication on September 3, 2024 and sell it today you would lose (277,008) from holding Shinsegae Information Communication or give up 23.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INNOX Advanced Materials vs. Shinsegae Information Communic
Performance |
| Timeline |
| INNOX Advanced Materials |
| Shinsegae Information |
INNOX Advanced and Shinsegae Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INNOX Advanced and Shinsegae Information
The main advantage of trading using opposite INNOX Advanced and Shinsegae Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INNOX Advanced position performs unexpectedly, Shinsegae Information 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 Shinsegae Information will offset losses from the drop in Shinsegae Information's long position.| INNOX Advanced vs. SK Hynix | INNOX Advanced vs. LX Semicon Co | INNOX Advanced vs. Tokai Carbon Korea | INNOX Advanced vs. People Technology |
| Shinsegae Information vs. Sangsangin Investment Securities | Shinsegae Information vs. NH Investment Securities | Shinsegae Information vs. GS Retail Co | Shinsegae Information vs. DB Financial Investment |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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