Correlation Between Jin Air and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both Jin Air 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 Jin Air and Shinhan Inverse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jin Air Co and Shinhan Inverse WTI, you can compare the effects of market volatilities on Jin Air 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 Jin Air with a short position of Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jin Air and Shinhan Inverse.
Diversification Opportunities for Jin Air and Shinhan Inverse
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jin and Shinhan is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Jin Air Co 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 Jin Air 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 Jin Air Co 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 Jin Air i.e., Jin Air and Shinhan Inverse go up and down completely randomly.
Pair Corralation between Jin Air and Shinhan Inverse
Assuming the 90 days trading horizon Jin Air Co is expected to under-perform the Shinhan Inverse. But the stock apears to be less risky and, when comparing its historical volatility, Jin Air Co is 1.02 times less risky than Shinhan Inverse. The stock trades about -0.06 of its potential returns per unit of risk. The Shinhan Inverse WTI is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 256,500 in Shinhan Inverse WTI on November 9, 2024 and sell it today you would earn a total of 8,000 from holding Shinhan Inverse WTI or generate 3.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jin Air Co vs. Shinhan Inverse WTI
Performance |
| Timeline |
| Jin Air |
| Shinhan Inverse WTI |
Jin Air and Shinhan Inverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jin Air and Shinhan Inverse
The main advantage of trading using opposite Jin Air and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jin Air 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.| Jin Air vs. SM Entertainment Co | Jin Air vs. SKONEC Entertainment Co | Jin Air vs. Jeju Beer Co | Jin Air vs. Worldex Industry Trading |
| Shinhan Inverse vs. PJ Metal Co | Shinhan Inverse vs. Nable Communications | Shinhan Inverse vs. Korea Information Communications | Shinhan Inverse vs. Lotte Data Communication |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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