Correlation Between Korea Investment and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both Korea Investment 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 Investment 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 Investment Holdings and Shinhan Inverse Silver, you can compare the effects of market volatilities on Korea Investment 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 Investment with a short position of Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Investment and Shinhan Inverse.
Diversification Opportunities for Korea Investment and Shinhan Inverse
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and Shinhan is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Korea Investment Holdings 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 Investment 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 Investment Holdings 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 Investment i.e., Korea Investment and Shinhan Inverse go up and down completely randomly.
Pair Corralation between Korea Investment and Shinhan Inverse
Assuming the 90 days trading horizon Korea Investment Holdings is expected to generate 1.04 times more return on investment than Shinhan Inverse. However, Korea Investment is 1.04 times more volatile than Shinhan Inverse Silver. It trades about 0.07 of its potential returns per unit of risk. Shinhan Inverse Silver is currently generating about -0.14 per unit of risk. If you would invest 5,380,000 in Korea Investment Holdings on September 13, 2024 and sell it today you would earn a total of 130,000 from holding Korea Investment Holdings or generate 2.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Investment Holdings vs. Shinhan Inverse Silver
Performance |
| Timeline |
| Korea Investment Holdings |
| Shinhan Inverse Silver |
Korea Investment and Shinhan Inverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Investment and Shinhan Inverse
The main advantage of trading using opposite Korea Investment and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Investment 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 Investment vs. Samsung Electronics Co | Korea Investment vs. Samsung Electronics Co | Korea Investment vs. SK Hynix | Korea Investment vs. POSCO Holdings |
| Shinhan Inverse vs. Koryo Credit Information | Shinhan Inverse vs. Daou Data Corp | Shinhan Inverse vs. SCI Information Service | Shinhan Inverse vs. Hansol Homedeco 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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