Correlation Between Shinsegae Information and Busan Ind
Can any of the company-specific risk be diversified away by investing in both Shinsegae Information and Busan Ind 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 Shinsegae Information and Busan Ind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinsegae Information Communication and Busan Ind, you can compare the effects of market volatilities on Shinsegae Information and Busan Ind 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 Shinsegae Information with a short position of Busan Ind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Information and Busan Ind.
Diversification Opportunities for Shinsegae Information and Busan Ind
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinsegae and Busan is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Information Communic and Busan Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Busan Ind and Shinsegae Information 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 Shinsegae Information Communication are associated (or correlated) with Busan Ind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Busan Ind has no effect on the direction of Shinsegae Information i.e., Shinsegae Information and Busan Ind go up and down completely randomly.
Pair Corralation between Shinsegae Information and Busan Ind
Assuming the 90 days trading horizon Shinsegae Information Communication is expected to under-perform the Busan Ind. But the stock apears to be less risky and, when comparing its historical volatility, Shinsegae Information Communication is 3.36 times less risky than Busan Ind. The stock trades about -0.01 of its potential returns per unit of risk. The Busan Ind is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 4,990,000 in Busan Ind on September 16, 2024 and sell it today you would earn a total of 3,810,000 from holding Busan Ind or generate 76.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Shinsegae Information Communic vs. Busan Ind
Performance |
Timeline |
Shinsegae Information |
Busan Ind |
Shinsegae Information and Busan Ind Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shinsegae Information and Busan Ind
The main advantage of trading using opposite Shinsegae Information and Busan Ind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Information position performs unexpectedly, Busan Ind 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 Busan Ind will offset losses from the drop in Busan Ind's long position.Shinsegae Information vs. Samsung Electronics Co | Shinsegae Information vs. Samsung Electronics Co | Shinsegae Information vs. SK Hynix | Shinsegae Information vs. POSCO Holdings |
Busan Ind vs. Daou Data Corp | Busan Ind vs. DataSolution | Busan Ind vs. Shinsegae Information Communication | Busan Ind vs. Ssangyong Information Communication |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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