Correlation Between Daekyung Machinery and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both Daekyung Machinery 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 Daekyung Machinery and Shinhan Inverse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daekyung Machinery Engineering and Shinhan Inverse Silver, you can compare the effects of market volatilities on Daekyung Machinery 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 Daekyung Machinery with a short position of Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daekyung Machinery and Shinhan Inverse.
Diversification Opportunities for Daekyung Machinery and Shinhan Inverse
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Daekyung and Shinhan is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Daekyung Machinery Engineering and Shinhan Inverse Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Inverse Silver and Daekyung Machinery 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 Daekyung Machinery Engineering 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 Silver has no effect on the direction of Daekyung Machinery i.e., Daekyung Machinery and Shinhan Inverse go up and down completely randomly.
Pair Corralation between Daekyung Machinery and Shinhan Inverse
Assuming the 90 days trading horizon Daekyung Machinery Engineering is expected to generate 2.06 times more return on investment than Shinhan Inverse. However, Daekyung Machinery is 2.06 times more volatile than Shinhan Inverse Silver. It trades about 0.33 of its potential returns per unit of risk. Shinhan Inverse Silver is currently generating about 0.31 per unit of risk. If you would invest 40,000 in Daekyung Machinery Engineering on August 30, 2024 and sell it today you would earn a total of 11,500 from holding Daekyung Machinery Engineering or generate 28.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Daekyung Machinery Engineering vs. Shinhan Inverse Silver
Performance |
| Timeline |
| Daekyung Machinery |
| Shinhan Inverse Silver |
Daekyung Machinery and Shinhan Inverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daekyung Machinery and Shinhan Inverse
The main advantage of trading using opposite Daekyung Machinery and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daekyung Machinery 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.| Daekyung Machinery vs. AptaBio Therapeutics | Daekyung Machinery vs. Daewoo SBI SPAC | Daekyung Machinery vs. Dream Security co | Daekyung Machinery vs. Microfriend |
| Shinhan Inverse vs. AptaBio Therapeutics | Shinhan Inverse vs. Daewoo SBI SPAC | Shinhan Inverse vs. Dream Security co | Shinhan Inverse vs. Microfriend |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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