Correlation Between Daebo Magnetic and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both Daebo Magnetic 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 Daebo Magnetic and Shinhan Inverse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daebo Magnetic CoLtd and Shinhan Inverse WTI, you can compare the effects of market volatilities on Daebo Magnetic 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 Daebo Magnetic with a short position of Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daebo Magnetic and Shinhan Inverse.
Diversification Opportunities for Daebo Magnetic and Shinhan Inverse
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Daebo and Shinhan is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Daebo Magnetic CoLtd 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 Daebo Magnetic 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 Daebo Magnetic CoLtd 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 Daebo Magnetic i.e., Daebo Magnetic and Shinhan Inverse go up and down completely randomly.
Pair Corralation between Daebo Magnetic and Shinhan Inverse
Assuming the 90 days trading horizon Daebo Magnetic CoLtd is expected to under-perform the Shinhan Inverse. In addition to that, Daebo Magnetic is 1.81 times more volatile than Shinhan Inverse WTI. It trades about -0.08 of its total potential returns per unit of risk. Shinhan Inverse WTI is currently generating about -0.01 per unit of volatility. If you would invest 324,500 in Shinhan Inverse WTI on December 4, 2024 and sell it today you would lose (48,000) from holding Shinhan Inverse WTI or give up 14.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Daebo Magnetic CoLtd vs. Shinhan Inverse WTI
Performance |
| Timeline |
| Daebo Magnetic CoLtd |
| Shinhan Inverse WTI |
Daebo Magnetic and Shinhan Inverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daebo Magnetic and Shinhan Inverse
The main advantage of trading using opposite Daebo Magnetic and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daebo Magnetic 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.| Daebo Magnetic vs. Kukil Metal Co | Daebo Magnetic vs. Sungho Electronics Corp | Daebo Magnetic vs. ABCO Electronics Co | Daebo Magnetic vs. LEENO Industrial |
| Shinhan Inverse vs. Busan Industrial Co | Shinhan Inverse vs. PJ Metal Co | Shinhan Inverse vs. Industrial Bank | Shinhan Inverse vs. Seohee Construction 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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