Correlation Between Korea Information and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both Korea Information 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 Korea Information and Shinhan Inverse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Information Engineering and Shinhan Inverse Silver, you can compare the effects of market volatilities on Korea Information 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 Korea Information with a short position of Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and Shinhan Inverse.
Diversification Opportunities for Korea Information and Shinhan Inverse
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and Shinhan is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information 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 Korea Information 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 Korea Information 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 Korea Information i.e., Korea Information and Shinhan Inverse go up and down completely randomly.
Pair Corralation between Korea Information and Shinhan Inverse
Assuming the 90 days trading horizon Korea Information Engineering is expected to under-perform the Shinhan Inverse. But the stock apears to be less risky and, when comparing its historical volatility, Korea Information Engineering is 1.1 times less risky than Shinhan Inverse. The stock trades about -0.3 of its potential returns per unit of risk. The Shinhan Inverse Silver is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 319,000 in Shinhan Inverse Silver on August 31, 2024 and sell it today you would earn a total of 47,000 from holding Shinhan Inverse Silver or generate 14.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Information Engineering vs. Shinhan Inverse Silver
Performance |
| Timeline |
| Korea Information |
| Shinhan Inverse Silver |
Korea Information and Shinhan Inverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and Shinhan Inverse
The main advantage of trading using opposite Korea Information and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information 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.| Korea Information vs. Woorim Machinery Co | Korea Information vs. Seohee Construction Co | Korea Information vs. Pyung Hwa Industrial | Korea Information vs. Kukil Metal Co |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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