Correlation Between Shinsung Delta and Aloys

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

By analyzing existing cross correlation between Shinsung Delta Tech and Aloys Inc, you can compare the effects of market volatilities on Shinsung Delta and Aloys 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 Shinsung Delta with a short position of Aloys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsung Delta and Aloys.

Diversification Opportunities for Shinsung Delta and Aloys

-0.75

Correlation Coefficient

Shinsung Delta  Aloys

Pay attention - limited upside

The 3 months correlation between Shinsung and Aloys is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Shinsung Delta Tech and Aloys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aloys Inc and Shinsung Delta 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 Shinsung Delta Tech are associated (or correlated) with Aloys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aloys Inc has no effect on the direction of Shinsung Delta i.e., Shinsung Delta and Aloys go up and down completely randomly.

Pair Corralation between Shinsung Delta and Aloys

Assuming the 90 days trading horizon Shinsung Delta Tech is expected to generate 1.31 times more return on investment than Aloys. However, Shinsung Delta is 1.31 times more volatile than Aloys Inc. It trades about 0.23 of its potential returns per unit of risk. Aloys Inc is currently generating about -0.06 per unit of risk. If you would invest  4,560,000  in Shinsung Delta Tech on September 15, 2024 and sell it today you would earn a total of  4,240,000  from holding Shinsung Delta Tech or generate 92.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Shinsung Delta Tech  vs.  Aloys Inc

Shinsung Delta Tech

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Shinsung Delta Tech are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shinsung Delta sustained solid returns over the last few months and may actually be approaching a breakup point.

Aloys Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aloys Inc 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 Shinsung Delta and Aloys

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

The idea behind Shinsung Delta Tech and Aloys Inc 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.