Correlation Between Microfriend and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both Microfriend 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 Microfriend and Shinhan Inverse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microfriend and Shinhan Inverse WTI, you can compare the effects of market volatilities on Microfriend 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 Microfriend with a short position of Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microfriend and Shinhan Inverse.
Diversification Opportunities for Microfriend and Shinhan Inverse
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Microfriend and Shinhan is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Microfriend 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 Microfriend 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 Microfriend 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 Microfriend i.e., Microfriend and Shinhan Inverse go up and down completely randomly.
Pair Corralation between Microfriend and Shinhan Inverse
Assuming the 90 days trading horizon Microfriend is expected to under-perform the Shinhan Inverse. In addition to that, Microfriend is 2.07 times more volatile than Shinhan Inverse WTI. It trades about -0.01 of its total potential returns per unit of risk. Shinhan Inverse WTI is currently generating about 0.0 per unit of volatility. If you would invest 290,000 in Shinhan Inverse WTI on November 27, 2024 and sell it today you would lose (22,500) from holding Shinhan Inverse WTI or give up 7.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.56% |
| Values | Daily Returns |
Microfriend vs. Shinhan Inverse WTI
Performance |
| Timeline |
| Microfriend |
| Shinhan Inverse WTI |
Microfriend and Shinhan Inverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microfriend and Shinhan Inverse
The main advantage of trading using opposite Microfriend and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microfriend 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.| Microfriend vs. LG Household Healthcare | Microfriend vs. Seoul Electronics Telecom | Microfriend vs. Kisan Telecom Co | Microfriend vs. Korea Information Communications |
| 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 Managers module to screen money managers from public funds and ETFs managed around the world.
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