Correlation Between HB Technology and Shinhan WTI
Can any of the company-specific risk be diversified away by investing in both HB Technology 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 HB Technology and Shinhan WTI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HB Technology TD and Shinhan WTI Futures, you can compare the effects of market volatilities on HB Technology 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 HB Technology with a short position of Shinhan WTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of HB Technology and Shinhan WTI.
Diversification Opportunities for HB Technology and Shinhan WTI
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between 078150 and Shinhan is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding HB Technology TD 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 HB Technology 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 HB Technology TD 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 HB Technology i.e., HB Technology and Shinhan WTI go up and down completely randomly.
Pair Corralation between HB Technology and Shinhan WTI
Assuming the 90 days trading horizon HB Technology is expected to generate 1.35 times less return on investment than Shinhan WTI. In addition to that, HB Technology is 2.44 times more volatile than Shinhan WTI Futures. It trades about 0.01 of its total potential returns per unit of risk. Shinhan WTI Futures is currently generating about 0.03 per unit of volatility. If you would invest 655,500 in Shinhan WTI Futures on September 3, 2024 and sell it today you would earn a total of 66,000 from holding Shinhan WTI Futures or generate 10.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.91% |
| Values | Daily Returns |
HB Technology TD vs. Shinhan WTI Futures
Performance |
| Timeline |
| HB Technology TD |
| Shinhan WTI Futures |
HB Technology and Shinhan WTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HB Technology and Shinhan WTI
The main advantage of trading using opposite HB Technology and Shinhan WTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HB Technology 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.| HB Technology vs. Dongsin Engineering Construction | HB Technology vs. Doosan Fuel Cell | HB Technology vs. Daishin Balance 1 | HB Technology vs. Total Soft Bank |
| Shinhan WTI vs. HB Technology TD | Shinhan WTI vs. Stic Investments | Shinhan WTI vs. Daol Investment Securities | Shinhan WTI vs. E Investment Development |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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