Correlation Between Sung Bo and Shinhan WTI
Can any of the company-specific risk be diversified away by investing in both Sung Bo and Shinhan WTI 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 Sung Bo and Shinhan WTI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sung Bo Chemicals and Shinhan WTI Futures, you can compare the effects of market volatilities on Sung Bo and Shinhan WTI 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 Sung Bo with a short position of Shinhan WTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sung Bo and Shinhan WTI.
Diversification Opportunities for Sung Bo and Shinhan WTI
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sung and Shinhan is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sung Bo Chemicals and Shinhan WTI Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan WTI Futures and Sung Bo 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 Sung Bo Chemicals are associated (or correlated) with Shinhan WTI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinhan WTI Futures has no effect on the direction of Sung Bo i.e., Sung Bo and Shinhan WTI go up and down completely randomly.
Pair Corralation between Sung Bo and Shinhan WTI
Assuming the 90 days trading horizon Sung Bo Chemicals is expected to under-perform the Shinhan WTI. But the stock apears to be less risky and, when comparing its historical volatility, Sung Bo Chemicals is 1.2 times less risky than Shinhan WTI. The stock trades about 0.0 of its potential returns per unit of risk. The Shinhan WTI Futures is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 695,000 in Shinhan WTI Futures on October 13, 2024 and sell it today you would earn a total of 86,500 from holding Shinhan WTI Futures or generate 12.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.76% |
| Values | Daily Returns |
Sung Bo Chemicals vs. Shinhan WTI Futures
Performance |
| Timeline |
| Sung Bo Chemicals |
| Shinhan WTI Futures |
Sung Bo and Shinhan WTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sung Bo and Shinhan WTI
The main advantage of trading using opposite Sung Bo and Shinhan WTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sung Bo position performs unexpectedly, Shinhan WTI 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 Shinhan WTI will offset losses from the drop in Shinhan WTI's long position.| Sung Bo vs. Daol Investment Securities | Sung Bo vs. Woori Technology Investment | Sung Bo vs. Youngsin Metal Industrial | Sung Bo vs. E Investment Development |
| Shinhan WTI vs. Kyung In Synthetic Corp | Shinhan WTI vs. Sung Bo Chemicals | Shinhan WTI vs. Hanwha Chemical Corp | Shinhan WTI vs. KPX Green Chemical |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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