Correlation Between Shinhan Inverse and Sungdo Engineering
Can any of the company-specific risk be diversified away by investing in both Shinhan Inverse and Sungdo 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 Shinhan Inverse and Sungdo Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinhan Inverse Silver and Sungdo Engineering Construction, you can compare the effects of market volatilities on Shinhan Inverse and Sungdo 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 Shinhan Inverse with a short position of Sungdo Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Inverse and Sungdo Engineering.
Diversification Opportunities for Shinhan Inverse and Sungdo Engineering
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shinhan and Sungdo is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse Silver and Sungdo Engineering Constructio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungdo Engineering and Shinhan Inverse 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 Shinhan Inverse Silver are associated (or correlated) with Sungdo Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungdo Engineering has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and Sungdo Engineering go up and down completely randomly.
Pair Corralation between Shinhan Inverse and Sungdo Engineering
Assuming the 90 days trading horizon Shinhan Inverse Silver is expected to generate 0.73 times more return on investment than Sungdo Engineering. However, Shinhan Inverse Silver is 1.37 times less risky than Sungdo Engineering. It trades about 0.08 of its potential returns per unit of risk. Sungdo Engineering Construction is currently generating about -0.08 per unit of risk. If you would invest 325,500 in Shinhan Inverse Silver on October 26, 2024 and sell it today you would earn a total of 28,000 from holding Shinhan Inverse Silver or generate 8.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Inverse Silver vs. Sungdo Engineering Constructio
Performance |
| Timeline |
| Shinhan Inverse Silver |
| Sungdo Engineering |
Shinhan Inverse and Sungdo Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Inverse and Sungdo Engineering
The main advantage of trading using opposite Shinhan Inverse and Sungdo Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Inverse position performs unexpectedly, Sungdo 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 Sungdo Engineering will offset losses from the drop in Sungdo Engineering's long position.| Shinhan Inverse vs. SK Telecom Co | Shinhan Inverse vs. Ecoplastic | Shinhan Inverse vs. Hyundai Engineering Plastics | Shinhan Inverse vs. INNOX Advanced Materials |
| Sungdo Engineering vs. E Investment Development | Sungdo Engineering vs. Samick Musical Instruments | Sungdo Engineering vs. Woori Technology Investment | Sungdo Engineering vs. Playgram 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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