Correlation Between Kolon Plastics and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both Kolon Plastics 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 Kolon Plastics and Shinhan Inverse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kolon Plastics and Shinhan Inverse Silver, you can compare the effects of market volatilities on Kolon Plastics 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 Kolon Plastics with a short position of Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kolon Plastics and Shinhan Inverse.
Diversification Opportunities for Kolon Plastics and Shinhan Inverse
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kolon and Shinhan is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Kolon Plastics and Shinhan Inverse Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Inverse Silver and Kolon Plastics 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 Kolon Plastics 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 Silver has no effect on the direction of Kolon Plastics i.e., Kolon Plastics and Shinhan Inverse go up and down completely randomly.
Pair Corralation between Kolon Plastics and Shinhan Inverse
Assuming the 90 days trading horizon Kolon Plastics is expected to generate 0.9 times more return on investment than Shinhan Inverse. However, Kolon Plastics is 1.12 times less risky than Shinhan Inverse. It trades about 0.09 of its potential returns per unit of risk. Shinhan Inverse Silver is currently generating about -0.09 per unit of risk. If you would invest 530,000 in Kolon Plastics on October 28, 2024 and sell it today you would earn a total of 12,000 from holding Kolon Plastics or generate 2.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kolon Plastics vs. Shinhan Inverse Silver
Performance |
| Timeline |
| Kolon Plastics |
| Shinhan Inverse Silver |
Kolon Plastics and Shinhan Inverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kolon Plastics and Shinhan Inverse
The main advantage of trading using opposite Kolon Plastics and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kolon Plastics 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.| Kolon Plastics vs. KB Financial Group | Kolon Plastics vs. Shinhan Financial Group | Kolon Plastics vs. Hana Financial | Kolon Plastics vs. Woori Financial Group |
| Shinhan Inverse vs. KB Financial Group | Shinhan Inverse vs. Shinhan Financial Group | Shinhan Inverse vs. Hana Financial | Shinhan Inverse vs. Woori Financial Group |
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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