Correlation Between Raontech and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both Raontech 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 Raontech and Shinhan Inverse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Raontech and Shinhan Inverse WTI, you can compare the effects of market volatilities on Raontech 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 Raontech with a short position of Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raontech and Shinhan Inverse.
Diversification Opportunities for Raontech and Shinhan Inverse
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Raontech and Shinhan is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Raontech 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 Raontech 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 Raontech 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 Raontech i.e., Raontech and Shinhan Inverse go up and down completely randomly.
Pair Corralation between Raontech and Shinhan Inverse
Assuming the 90 days trading horizon Raontech is expected to generate 4.1 times more return on investment than Shinhan Inverse. However, Raontech is 4.1 times more volatile than Shinhan Inverse WTI. It trades about 0.42 of its potential returns per unit of risk. Shinhan Inverse WTI is currently generating about -0.28 per unit of risk. If you would invest 277,500 in Raontech on October 13, 2024 and sell it today you would earn a total of 110,000 from holding Raontech or generate 39.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Raontech vs. Shinhan Inverse WTI
Performance |
| Timeline |
| Raontech |
| Shinhan Inverse WTI |
Raontech and Shinhan Inverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raontech and Shinhan Inverse
The main advantage of trading using opposite Raontech and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raontech 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.| Raontech vs. EV Advanced Material | Raontech vs. PI Advanced Materials | Raontech vs. Kolon Plastics | Raontech vs. Ecoplastic |
| Shinhan Inverse vs. Kyung Chang Industrial | Shinhan Inverse vs. Seoyon Topmetal Co | Shinhan Inverse vs. Raontech | Shinhan Inverse vs. LEENO Industrial |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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