Correlation Between EV Advanced and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both EV Advanced 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 EV Advanced and Shinhan Inverse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EV Advanced Material and Shinhan Inverse Copper, you can compare the effects of market volatilities on EV Advanced 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 EV Advanced with a short position of Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of EV Advanced and Shinhan Inverse.
Diversification Opportunities for EV Advanced and Shinhan Inverse
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 131400 and Shinhan is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding EV Advanced Material and Shinhan Inverse Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Inverse Copper and EV Advanced 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 EV Advanced Material 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 Copper has no effect on the direction of EV Advanced i.e., EV Advanced and Shinhan Inverse go up and down completely randomly.
Pair Corralation between EV Advanced and Shinhan Inverse
Assuming the 90 days trading horizon EV Advanced Material is expected to under-perform the Shinhan Inverse. But the stock apears to be less risky and, when comparing its historical volatility, EV Advanced Material is 1.1 times less risky than Shinhan Inverse. The stock trades about -0.25 of its potential returns per unit of risk. The Shinhan Inverse Copper is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 566,000 in Shinhan Inverse Copper on November 7, 2024 and sell it today you would lose (22,500) from holding Shinhan Inverse Copper or give up 3.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
EV Advanced Material vs. Shinhan Inverse Copper
Performance |
| Timeline |
| EV Advanced Material |
| Shinhan Inverse Copper |
EV Advanced and Shinhan Inverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EV Advanced and Shinhan Inverse
The main advantage of trading using opposite EV Advanced and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EV Advanced 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.| EV Advanced vs. Samsung Electronics Co | EV Advanced vs. Samsung Electronics Co | EV Advanced vs. Hyundai Motor Co | EV Advanced vs. Hyundai Motor |
| Shinhan Inverse vs. Dongbang Transport Logistics | Shinhan Inverse vs. Heungkuk Metaltech CoLtd | Shinhan Inverse vs. FNSTech Co | Shinhan Inverse vs. Woori Technology |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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