Correlation Between Seah Steel and Shinil Electronics
Can any of the company-specific risk be diversified away by investing in both Seah Steel and Shinil Electronics 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 Seah Steel and Shinil Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seah Steel Corp and Shinil Electronics Co, you can compare the effects of market volatilities on Seah Steel and Shinil Electronics 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 Seah Steel with a short position of Shinil Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seah Steel and Shinil Electronics.
Diversification Opportunities for Seah Steel and Shinil Electronics
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seah and Shinil is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Seah Steel Corp and Shinil Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinil Electronics and Seah 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 Seah Steel Corp are associated (or correlated) with Shinil Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinil Electronics has no effect on the direction of Seah Steel i.e., Seah Steel and Shinil Electronics go up and down completely randomly.
Pair Corralation between Seah Steel and Shinil Electronics
Assuming the 90 days trading horizon Seah Steel Corp is expected to generate 1.5 times more return on investment than Shinil Electronics. However, Seah Steel is 1.5 times more volatile than Shinil Electronics Co. It trades about 0.01 of its potential returns per unit of risk. Shinil Electronics Co is currently generating about -0.06 per unit of risk. If you would invest 14,160,000 in Seah Steel Corp on November 6, 2024 and sell it today you would earn a total of 310,000 from holding Seah Steel Corp or generate 2.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seah Steel Corp vs. Shinil Electronics Co
Performance |
| Timeline |
| Seah Steel Corp |
| Shinil Electronics |
Seah Steel and Shinil Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seah Steel and Shinil Electronics
The main advantage of trading using opposite Seah Steel and Shinil Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seah Steel position performs unexpectedly, Shinil Electronics 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 Shinil Electronics will offset losses from the drop in Shinil Electronics' long position.| Seah Steel vs. Woori Technology Investment | Seah Steel vs. SBI Investment KOREA | Seah Steel vs. Sangsangin Investment Securities | Seah Steel vs. EBEST Investment Securities |
| Shinil Electronics vs. TS Investment Corp | Shinil Electronics vs. EBEST Investment Securities | Shinil Electronics vs. Digital Power Communications | Shinil Electronics vs. KTB Investment Securities |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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