Correlation Between AfreecaTV and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both AfreecaTV 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 AfreecaTV and Shinhan Inverse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AfreecaTV Co and Shinhan Inverse WTI, you can compare the effects of market volatilities on AfreecaTV 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 AfreecaTV with a short position of Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of AfreecaTV and Shinhan Inverse.
Diversification Opportunities for AfreecaTV and Shinhan Inverse
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AfreecaTV and Shinhan is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding AfreecaTV Co and Shinhan Inverse WTI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Inverse WTI and AfreecaTV 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 AfreecaTV 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 WTI has no effect on the direction of AfreecaTV i.e., AfreecaTV and Shinhan Inverse go up and down completely randomly.
Pair Corralation between AfreecaTV and Shinhan Inverse
Assuming the 90 days trading horizon AfreecaTV is expected to generate 2.05 times less return on investment than Shinhan Inverse. In addition to that, AfreecaTV is 1.79 times more volatile than Shinhan Inverse WTI. It trades about 0.01 of its total potential returns per unit of risk. Shinhan Inverse WTI is currently generating about 0.05 per unit of volatility. If you would invest 249,500 in Shinhan Inverse WTI on September 3, 2024 and sell it today you would earn a total of 29,000 from holding Shinhan Inverse WTI or generate 11.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.74% |
| Values | Daily Returns |
AfreecaTV Co vs. Shinhan Inverse WTI
Performance |
| Timeline |
| AfreecaTV |
| Shinhan Inverse WTI |
AfreecaTV and Shinhan Inverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AfreecaTV and Shinhan Inverse
The main advantage of trading using opposite AfreecaTV and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AfreecaTV 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.The idea behind AfreecaTV Co and Shinhan Inverse WTI pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Shinhan Inverse vs. Kukdo Chemical Co | Shinhan Inverse vs. Korea Petro Chemical | Shinhan Inverse vs. LG Chemicals | Shinhan Inverse vs. Daehan Synthetic Fiber |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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