Correlation Between Digital Multimedia and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both Digital Multimedia 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 Digital Multimedia and Shinhan Inverse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Multimedia Technology and Shinhan Inverse Copper, you can compare the effects of market volatilities on Digital Multimedia 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 Digital Multimedia with a short position of Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Multimedia and Shinhan Inverse.
Diversification Opportunities for Digital Multimedia and Shinhan Inverse
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Digital and Shinhan is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Digital Multimedia Technology 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 Digital Multimedia 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 Digital Multimedia Technology 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 Digital Multimedia i.e., Digital Multimedia and Shinhan Inverse go up and down completely randomly.
Pair Corralation between Digital Multimedia and Shinhan Inverse
Assuming the 90 days trading horizon Digital Multimedia Technology is expected to under-perform the Shinhan Inverse. In addition to that, Digital Multimedia is 2.08 times more volatile than Shinhan Inverse Copper. It trades about -0.11 of its total potential returns per unit of risk. Shinhan Inverse Copper is currently generating about -0.02 per unit of volatility. If you would invest 608,500 in Shinhan Inverse Copper on September 2, 2024 and sell it today you would lose (43,500) from holding Shinhan Inverse Copper or give up 7.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.16% |
| Values | Daily Returns |
Digital Multimedia Technology vs. Shinhan Inverse Copper
Performance |
| Timeline |
| Digital Multimedia |
| Shinhan Inverse Copper |
Digital Multimedia and Shinhan Inverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Multimedia and Shinhan Inverse
The main advantage of trading using opposite Digital Multimedia and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Multimedia 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.| Digital Multimedia vs. AptaBio Therapeutics | Digital Multimedia vs. Daewoo SBI SPAC | Digital Multimedia vs. Dream Security co | Digital Multimedia vs. Microfriend |
| Shinhan Inverse vs. Woorim Machinery Co | Shinhan Inverse vs. SK Chemicals Co | Shinhan Inverse vs. Samick Musical Instruments | Shinhan Inverse vs. KEPCO Engineering Construction |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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