Correlation Between AurosTechnology and Shinsegae Food
Can any of the company-specific risk be diversified away by investing in both AurosTechnology and Shinsegae Food 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 AurosTechnology and Shinsegae Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AurosTechnology and Shinsegae Food, you can compare the effects of market volatilities on AurosTechnology and Shinsegae Food 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 AurosTechnology with a short position of Shinsegae Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of AurosTechnology and Shinsegae Food.
Diversification Opportunities for AurosTechnology and Shinsegae Food
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AurosTechnology and Shinsegae is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding AurosTechnology and Shinsegae Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Food and AurosTechnology 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 AurosTechnology are associated (or correlated) with Shinsegae Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Food has no effect on the direction of AurosTechnology i.e., AurosTechnology and Shinsegae Food go up and down completely randomly.
Pair Corralation between AurosTechnology and Shinsegae Food
Assuming the 90 days trading horizon AurosTechnology is expected to under-perform the Shinsegae Food. In addition to that, AurosTechnology is 2.98 times more volatile than Shinsegae Food. It trades about -0.03 of its total potential returns per unit of risk. Shinsegae Food is currently generating about -0.07 per unit of volatility. If you would invest 4,009,699 in Shinsegae Food on September 4, 2024 and sell it today you would lose (914,699) from holding Shinsegae Food or give up 22.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AurosTechnology vs. Shinsegae Food
Performance |
| Timeline |
| AurosTechnology |
| Shinsegae Food |
AurosTechnology and Shinsegae Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AurosTechnology and Shinsegae Food
The main advantage of trading using opposite AurosTechnology and Shinsegae Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AurosTechnology position performs unexpectedly, Shinsegae Food 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 Food will offset losses from the drop in Shinsegae Food's long position.| AurosTechnology vs. SK Hynix | AurosTechnology vs. LX Semicon Co | AurosTechnology vs. Tokai Carbon Korea | AurosTechnology vs. People Technology |
| Shinsegae Food vs. Korea Real Estate | Shinsegae Food vs. Busan Industrial Co | Shinsegae Food vs. UNISEM Co | Shinsegae Food vs. RPBio Inc |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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