Correlation Between Jeju Beer and Shinsegae Engineering
Can any of the company-specific risk be diversified away by investing in both Jeju Beer and Shinsegae Engineering 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 Jeju Beer and Shinsegae Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeju Beer Co and Shinsegae Engineering Construction, you can compare the effects of market volatilities on Jeju Beer and Shinsegae Engineering 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 Jeju Beer with a short position of Shinsegae Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Beer and Shinsegae Engineering.
Diversification Opportunities for Jeju Beer and Shinsegae Engineering
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jeju and Shinsegae is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Beer Co and Shinsegae Engineering Construc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Engineering and Jeju Beer 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 Jeju Beer Co are associated (or correlated) with Shinsegae Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Engineering has no effect on the direction of Jeju Beer i.e., Jeju Beer and Shinsegae Engineering go up and down completely randomly.
Pair Corralation between Jeju Beer and Shinsegae Engineering
Assuming the 90 days trading horizon Jeju Beer Co is expected to under-perform the Shinsegae Engineering. In addition to that, Jeju Beer is 1.51 times more volatile than Shinsegae Engineering Construction. It trades about -0.02 of its total potential returns per unit of risk. Shinsegae Engineering Construction is currently generating about 0.02 per unit of volatility. If you would invest 1,640,663 in Shinsegae Engineering Construction on September 13, 2024 and sell it today you would earn a total of 162,337 from holding Shinsegae Engineering Construction or generate 9.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Beer Co vs. Shinsegae Engineering Construc
Performance |
| Timeline |
| Jeju Beer |
| Shinsegae Engineering |
Jeju Beer and Shinsegae Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Beer and Shinsegae Engineering
The main advantage of trading using opposite Jeju Beer and Shinsegae Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Beer position performs unexpectedly, Shinsegae Engineering 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 Engineering will offset losses from the drop in Shinsegae Engineering's long position.| Jeju Beer vs. AptaBio Therapeutics | Jeju Beer vs. Daewoo SBI SPAC | Jeju Beer vs. Dream Security co | Jeju Beer vs. Microfriend |
| Shinsegae Engineering vs. Samsung Electronics Co | Shinsegae Engineering vs. Samsung Electronics Co | Shinsegae Engineering vs. SK Hynix | Shinsegae Engineering vs. POSCO Holdings |
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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