Correlation Between HYBE and Shin Steel
Can any of the company-specific risk be diversified away by investing in both HYBE and Shin Steel 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 HYBE and Shin Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HYBE Co and Shin Steel Co, you can compare the effects of market volatilities on HYBE and Shin Steel 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 HYBE with a short position of Shin Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of HYBE and Shin Steel.
Diversification Opportunities for HYBE and Shin Steel
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HYBE and Shin is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding HYBE Co and Shin Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Steel and HYBE 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 HYBE Co are associated (or correlated) with Shin Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Steel has no effect on the direction of HYBE i.e., HYBE and Shin Steel go up and down completely randomly.
Pair Corralation between HYBE and Shin Steel
Assuming the 90 days trading horizon HYBE Co is expected to under-perform the Shin Steel. But the stock apears to be less risky and, when comparing its historical volatility, HYBE Co is 1.56 times less risky than Shin Steel. The stock trades about -0.03 of its potential returns per unit of risk. The Shin Steel Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 277,694 in Shin Steel Co on September 4, 2024 and sell it today you would lose (34,694) from holding Shin Steel Co or give up 12.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HYBE Co vs. Shin Steel Co
Performance |
| Timeline |
| HYBE |
| Shin Steel |
HYBE and Shin Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HYBE and Shin Steel
The main advantage of trading using opposite HYBE and Shin Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HYBE position performs unexpectedly, Shin Steel 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 Shin Steel will offset losses from the drop in Shin Steel's long position.The idea behind HYBE Co and Shin Steel Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Shin Steel vs. Samsung Electronics Co | Shin Steel vs. Samsung Electronics Co | Shin Steel vs. LG Energy Solution | Shin Steel 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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