Correlation Between SKONEC Entertainment and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both SKONEC Entertainment 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 SKONEC Entertainment and Shinhan Inverse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SKONEC Entertainment Co and Shinhan Inverse Copper, you can compare the effects of market volatilities on SKONEC Entertainment 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 SKONEC Entertainment with a short position of Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of SKONEC Entertainment and Shinhan Inverse.
Diversification Opportunities for SKONEC Entertainment and Shinhan Inverse
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SKONEC and Shinhan is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding SKONEC Entertainment Co 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 SKONEC Entertainment 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 SKONEC Entertainment 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 Copper has no effect on the direction of SKONEC Entertainment i.e., SKONEC Entertainment and Shinhan Inverse go up and down completely randomly.
Pair Corralation between SKONEC Entertainment and Shinhan Inverse
Assuming the 90 days trading horizon SKONEC Entertainment Co is expected to generate 3.64 times more return on investment than Shinhan Inverse. However, SKONEC Entertainment is 3.64 times more volatile than Shinhan Inverse Copper. It trades about 0.35 of its potential returns per unit of risk. Shinhan Inverse Copper is currently generating about -0.17 per unit of risk. If you would invest 308,500 in SKONEC Entertainment Co on October 17, 2024 and sell it today you would earn a total of 97,500 from holding SKONEC Entertainment Co or generate 31.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
SKONEC Entertainment Co vs. Shinhan Inverse Copper
Performance |
| Timeline |
| SKONEC Entertainment |
| Shinhan Inverse Copper |
SKONEC Entertainment and Shinhan Inverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SKONEC Entertainment and Shinhan Inverse
The main advantage of trading using opposite SKONEC Entertainment and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SKONEC Entertainment 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.| SKONEC Entertainment vs. Kakao Games Corp | SKONEC Entertainment vs. Posco ICT | SKONEC Entertainment vs. Devsisters corporation | SKONEC Entertainment vs. Konan Technology |
| Shinhan Inverse vs. TJ media Co | Shinhan Inverse vs. SKONEC Entertainment Co | Shinhan Inverse vs. Seoul Electronics Telecom | Shinhan Inverse vs. Samji Electronics Co |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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