Correlation Between Seoul Semiconductor and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both Seoul Semiconductor 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 Seoul Semiconductor and Shinhan Inverse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seoul Semiconductor Co and Shinhan Inverse Silver, you can compare the effects of market volatilities on Seoul Semiconductor 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 Seoul Semiconductor with a short position of Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Semiconductor and Shinhan Inverse.
Diversification Opportunities for Seoul Semiconductor and Shinhan Inverse
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Seoul and Shinhan is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Semiconductor Co 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 Seoul Semiconductor 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 Seoul Semiconductor 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 Silver has no effect on the direction of Seoul Semiconductor i.e., Seoul Semiconductor and Shinhan Inverse go up and down completely randomly.
Pair Corralation between Seoul Semiconductor and Shinhan Inverse
Assuming the 90 days trading horizon Seoul Semiconductor Co is expected to under-perform the Shinhan Inverse. In addition to that, Seoul Semiconductor is 1.36 times more volatile than Shinhan Inverse Silver. It trades about -0.43 of its total potential returns per unit of risk. Shinhan Inverse Silver is currently generating about 0.27 per unit of volatility. If you would invest 325,500 in Shinhan Inverse Silver on August 29, 2024 and sell it today you would earn a total of 35,500 from holding Shinhan Inverse Silver or generate 10.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Seoul Semiconductor Co vs. Shinhan Inverse Silver
Performance |
| Timeline |
| Seoul Semiconductor |
| Shinhan Inverse Silver |
Seoul Semiconductor and Shinhan Inverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Semiconductor and Shinhan Inverse
The main advantage of trading using opposite Seoul Semiconductor and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Semiconductor 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.| Seoul Semiconductor vs. Daou Data Corp | Seoul Semiconductor vs. Busan Industrial Co | Seoul Semiconductor vs. Busan Ind | Seoul Semiconductor vs. Shinhan WTI Futures |
| Shinhan Inverse vs. Samyung Trading Co | Shinhan Inverse vs. Genie Music | Shinhan Inverse vs. Sangsangin Investment Securities | Shinhan Inverse vs. SBI Investment KOREA |
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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