Correlation Between Dongil Metal and Shinhan WTI
Can any of the company-specific risk be diversified away by investing in both Dongil Metal 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 Dongil Metal and Shinhan WTI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongil Metal Co and Shinhan WTI Futures, you can compare the effects of market volatilities on Dongil Metal 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 Dongil Metal with a short position of Shinhan WTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Metal and Shinhan WTI.
Diversification Opportunities for Dongil Metal and Shinhan WTI
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dongil and Shinhan is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Metal Co 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 Dongil Metal 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 Dongil Metal Co 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 Dongil Metal i.e., Dongil Metal and Shinhan WTI go up and down completely randomly.
Pair Corralation between Dongil Metal and Shinhan WTI
Assuming the 90 days trading horizon Dongil Metal Co is expected to under-perform the Shinhan WTI. In addition to that, Dongil Metal is 1.46 times more volatile than Shinhan WTI Futures. It trades about -0.06 of its total potential returns per unit of risk. Shinhan WTI Futures is currently generating about 0.02 per unit of volatility. If you would invest 641,500 in Shinhan WTI Futures on September 3, 2024 and sell it today you would earn a total of 80,000 from holding Shinhan WTI Futures or generate 12.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.54% |
| Values | Daily Returns |
Dongil Metal Co vs. Shinhan WTI Futures
Performance |
| Timeline |
| Dongil Metal |
| Shinhan WTI Futures |
Dongil Metal and Shinhan WTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongil Metal and Shinhan WTI
The main advantage of trading using opposite Dongil Metal and Shinhan WTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Metal 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.| Dongil Metal vs. LG Chemicals | Dongil Metal vs. POSCO Holdings | Dongil Metal vs. Hanwha Solutions | Dongil Metal vs. Lotte Chemical Corp |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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