Correlation Between SHINWON STRUCTION and KT Submarine

Can any of the company-specific risk be diversified away by investing in both SHINWON STRUCTION and KT Submarine 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 SHINWON STRUCTION and KT Submarine into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SHINWON STRUCTION COMPANY and KT Submarine Co, you can compare the effects of market volatilities on SHINWON STRUCTION and KT Submarine 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 SHINWON STRUCTION with a short position of KT Submarine. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHINWON STRUCTION and KT Submarine.

Diversification Opportunities for SHINWON STRUCTION and KT Submarine

0.73

Correlation Coefficient

SHINWON STRUCTION  KT Submarine

Poor diversification

The 3 months correlation between SHINWON and 060370 is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding SHINWON STRUCTION COMPANY and KT Submarine Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Submarine and SHINWON STRUCTION 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 SHINWON STRUCTION COMPANY are associated (or correlated) with KT Submarine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KT Submarine has no effect on the direction of SHINWON STRUCTION i.e., SHINWON STRUCTION and KT Submarine go up and down completely randomly.

Pair Corralation between SHINWON STRUCTION and KT Submarine

Assuming the 90 days trading horizon SHINWON STRUCTION COMPANY is expected to generate 1.28 times more return on investment than KT Submarine. However, SHINWON STRUCTION is 1.28 times more volatile than KT Submarine Co. It trades about -0.06 of its potential returns per unit of risk. KT Submarine Co is currently generating about -0.1 per unit of risk. If you would invest  376,000  in SHINWON STRUCTION COMPANY on September 12, 2024 and sell it today you would lose (81,000) from holding SHINWON STRUCTION COMPANY or give up 21.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.31%
Values	Daily Returns

SHINWON STRUCTION COMPANY  vs.  KT Submarine Co

SHINWON STRUCTION PANY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SHINWON STRUCTION COMPANY has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

KT Submarine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KT Submarine Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with SHINWON STRUCTION and KT Submarine

The main advantage of trading using opposite SHINWON STRUCTION and KT Submarine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHINWON STRUCTION position performs unexpectedly, KT Submarine 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 KT Submarine will offset losses from the drop in KT Submarine's long position.

The idea behind SHINWON STRUCTION COMPANY and KT Submarine Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Valuation module to check real value of public entities based on technical and fundamental data.