Correlation Between KakaoBank Corp and Shinhan WTI
Can any of the company-specific risk be diversified away by investing in both KakaoBank Corp and Shinhan WTI 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 KakaoBank Corp and Shinhan WTI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KakaoBank Corp and Shinhan WTI Futures, you can compare the effects of market volatilities on KakaoBank Corp and Shinhan WTI 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 KakaoBank Corp with a short position of Shinhan WTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of KakaoBank Corp and Shinhan WTI.
Diversification Opportunities for KakaoBank Corp and Shinhan WTI
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KakaoBank and Shinhan is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding KakaoBank Corp and Shinhan WTI Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan WTI Futures and KakaoBank Corp 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 KakaoBank Corp are associated (or correlated) with Shinhan WTI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinhan WTI Futures has no effect on the direction of KakaoBank Corp i.e., KakaoBank Corp and Shinhan WTI go up and down completely randomly.
Pair Corralation between KakaoBank Corp and Shinhan WTI
Assuming the 90 days trading horizon KakaoBank Corp is expected to generate 0.61 times more return on investment than Shinhan WTI. However, KakaoBank Corp is 1.64 times less risky than Shinhan WTI. It trades about -0.12 of its potential returns per unit of risk. Shinhan WTI Futures is currently generating about -0.09 per unit of risk. If you would invest 2,315,000 in KakaoBank Corp on January 24, 2025 and sell it today you would lose (140,000) from holding KakaoBank Corp or give up 6.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KakaoBank Corp vs. Shinhan WTI Futures
Performance |
| Timeline |
| KakaoBank Corp |
| Shinhan WTI Futures |
KakaoBank Corp and Shinhan WTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KakaoBank Corp and Shinhan WTI
The main advantage of trading using opposite KakaoBank Corp and Shinhan WTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KakaoBank Corp position performs unexpectedly, Shinhan WTI 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 WTI will offset losses from the drop in Shinhan WTI's long position.| KakaoBank Corp vs. Daejung Chemicals Metals | KakaoBank Corp vs. Coloray International Investment | KakaoBank Corp vs. Eugene Investment Securities | KakaoBank Corp vs. Korea Investment Holdings |
| Shinhan WTI vs. Samsung Electronics Co | Shinhan WTI vs. Samsung Electronics Co | Shinhan WTI vs. LG Energy Solution | Shinhan WTI vs. SK Hynix |
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 CEOs Directory module to screen CEOs from public companies around the world.
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