Correlation Between Playgram and Shinhan WTI
Can any of the company-specific risk be diversified away by investing in both Playgram 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 Playgram and Shinhan WTI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playgram Co and Shinhan WTI Futures, you can compare the effects of market volatilities on Playgram 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 Playgram with a short position of Shinhan WTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playgram and Shinhan WTI.
Diversification Opportunities for Playgram and Shinhan WTI
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Playgram and Shinhan is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Playgram Co 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 Playgram 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 Playgram Co 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 Playgram i.e., Playgram and Shinhan WTI go up and down completely randomly.
Pair Corralation between Playgram and Shinhan WTI
Assuming the 90 days trading horizon Playgram Co is expected to under-perform the Shinhan WTI. In addition to that, Playgram is 2.57 times more volatile than Shinhan WTI Futures. It trades about -0.02 of its total potential returns per unit of risk. Shinhan WTI Futures is currently generating about 0.05 per unit of volatility. If you would invest 603,000 in Shinhan WTI Futures on November 6, 2024 and sell it today you would earn a total of 186,500 from holding Shinhan WTI Futures or generate 30.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.74% |
| Values | Daily Returns |
Playgram Co vs. Shinhan WTI Futures
Performance |
| Timeline |
| Playgram |
| Shinhan WTI Futures |
Playgram and Shinhan WTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playgram and Shinhan WTI
The main advantage of trading using opposite Playgram and Shinhan WTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playgram 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.| Playgram vs. SEOJEON ELECTRIC MACHINERY | Playgram vs. Tuksu Engineering ConstructionLtd | Playgram vs. Iljin Display | Playgram vs. ENERGYMACHINERY KOREA CoLtd |
| Shinhan WTI vs. Sung Bo Chemicals | Shinhan WTI vs. Daejung Chemicals Metals | Shinhan WTI vs. Infinitt Healthcare Co | Shinhan WTI vs. LG Household Healthcare |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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