Correlation Between Hotel Shilla and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both Hotel Shilla and Shinhan Inverse 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 Hotel Shilla and Shinhan Inverse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hotel Shilla Co and Shinhan Inverse Copper, you can compare the effects of market volatilities on Hotel Shilla and Shinhan Inverse 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 Hotel Shilla with a short position of Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Shilla and Shinhan Inverse.
Diversification Opportunities for Hotel Shilla and Shinhan Inverse
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hotel and Shinhan is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Shilla Co and Shinhan Inverse Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Inverse Copper and Hotel Shilla 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 Hotel Shilla Co are associated (or correlated) with Shinhan Inverse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinhan Inverse Copper has no effect on the direction of Hotel Shilla i.e., Hotel Shilla and Shinhan Inverse go up and down completely randomly.
Pair Corralation between Hotel Shilla and Shinhan Inverse
Assuming the 90 days trading horizon Hotel Shilla Co is expected to generate 0.32 times more return on investment than Shinhan Inverse. However, Hotel Shilla Co is 3.14 times less risky than Shinhan Inverse. It trades about -0.05 of its potential returns per unit of risk. Shinhan Inverse Copper is currently generating about -0.22 per unit of risk. If you would invest 3,010,000 in Hotel Shilla Co on November 3, 2024 and sell it today you would lose (15,000) from holding Hotel Shilla Co or give up 0.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Hotel Shilla Co vs. Shinhan Inverse Copper
Performance |
| Timeline |
| Hotel Shilla |
| Shinhan Inverse Copper |
Hotel Shilla and Shinhan Inverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Shilla and Shinhan Inverse
The main advantage of trading using opposite Hotel Shilla and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Shilla position performs unexpectedly, Shinhan Inverse 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 Inverse will offset losses from the drop in Shinhan Inverse's long position.| Hotel Shilla vs. DSC Investment | Hotel Shilla vs. Sangsangin Investment Securities | Hotel Shilla vs. Tway Air Co | Hotel Shilla vs. Air Busan Co |
| Shinhan Inverse vs. Polaris Office Corp | Shinhan Inverse vs. Grand Korea Leisure | Shinhan Inverse vs. Korean Reinsurance Co | Shinhan Inverse vs. Shinhan Inverse Silver |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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