Correlation Between Kisan Telecom and Shinhan WTI
Can any of the company-specific risk be diversified away by investing in both Kisan Telecom 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 Kisan Telecom and Shinhan WTI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kisan Telecom Co and Shinhan WTI Futures, you can compare the effects of market volatilities on Kisan Telecom 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 Kisan Telecom with a short position of Shinhan WTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kisan Telecom and Shinhan WTI.
Diversification Opportunities for Kisan Telecom and Shinhan WTI
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kisan and Shinhan is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Kisan Telecom 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 Kisan Telecom 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 Kisan Telecom 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 Kisan Telecom i.e., Kisan Telecom and Shinhan WTI go up and down completely randomly.
Pair Corralation between Kisan Telecom and Shinhan WTI
Assuming the 90 days trading horizon Kisan Telecom is expected to generate 2.15 times less return on investment than Shinhan WTI. But when comparing it to its historical volatility, Kisan Telecom Co is 1.05 times less risky than Shinhan WTI. It trades about 0.07 of its potential returns per unit of risk. Shinhan WTI Futures is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 738,000 in Shinhan WTI Futures on October 26, 2024 and sell it today you would earn a total of 64,000 from holding Shinhan WTI Futures or generate 8.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kisan Telecom Co vs. Shinhan WTI Futures
Performance |
| Timeline |
| Kisan Telecom |
| Shinhan WTI Futures |
Kisan Telecom and Shinhan WTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kisan Telecom and Shinhan WTI
The main advantage of trading using opposite Kisan Telecom and Shinhan WTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kisan Telecom 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.| Kisan Telecom vs. Samsung Electronics Co | Kisan Telecom vs. Samsung Electronics Co | Kisan Telecom vs. SK Hynix | Kisan Telecom vs. HMM Co |
| Shinhan WTI vs. Kisan Telecom Co | Shinhan WTI vs. Mgame Corp | Shinhan WTI vs. Daishin Information Communications | Shinhan WTI vs. Daelim Trading Co |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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