Correlation Between Dongwoo Farm and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both Dongwoo Farm 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 Dongwoo Farm and Shinhan Inverse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwoo Farm To and Shinhan Inverse WTI, you can compare the effects of market volatilities on Dongwoo Farm 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 Dongwoo Farm with a short position of Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwoo Farm and Shinhan Inverse.
Diversification Opportunities for Dongwoo Farm and Shinhan Inverse
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dongwoo and Shinhan is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Dongwoo Farm To 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 Dongwoo Farm 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 Dongwoo Farm To 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 Dongwoo Farm i.e., Dongwoo Farm and Shinhan Inverse go up and down completely randomly.
Pair Corralation between Dongwoo Farm and Shinhan Inverse
Assuming the 90 days trading horizon Dongwoo Farm is expected to generate 1.36 times less return on investment than Shinhan Inverse. But when comparing it to its historical volatility, Dongwoo Farm To is 1.75 times less risky than Shinhan Inverse. It trades about 0.22 of its potential returns per unit of risk. Shinhan Inverse WTI is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 257,000 in Shinhan Inverse WTI on November 27, 2024 and sell it today you would earn a total of 10,500 from holding Shinhan Inverse WTI or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwoo Farm To vs. Shinhan Inverse WTI
Performance |
| Timeline |
| Dongwoo Farm To |
| Shinhan Inverse WTI |
Dongwoo Farm and Shinhan Inverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwoo Farm and Shinhan Inverse
The main advantage of trading using opposite Dongwoo Farm and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwoo Farm 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.| Dongwoo Farm vs. Maeil Dairies Co | Dongwoo Farm vs. HYUNDAI FEED | Dongwoo Farm vs. Neo Cremar Co | Dongwoo Farm vs. Wing Yip Food |
| Shinhan Inverse vs. Innowireless Co | Shinhan Inverse vs. Kisan Telecom Co | Shinhan Inverse vs. Chorokbaem Healthcare Co | Shinhan Inverse vs. Nature and Environment |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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