Correlation Between Shinhan Inverse and Kukdo Chemical
Can any of the company-specific risk be diversified away by investing in both Shinhan Inverse and Kukdo Chemical 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 Shinhan Inverse and Kukdo Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinhan Inverse WTI and Kukdo Chemical Co, you can compare the effects of market volatilities on Shinhan Inverse and Kukdo Chemical 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 Shinhan Inverse with a short position of Kukdo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Inverse and Kukdo Chemical.
Diversification Opportunities for Shinhan Inverse and Kukdo Chemical
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinhan and Kukdo is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse WTI and Kukdo Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukdo Chemical and Shinhan Inverse 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 Shinhan Inverse WTI are associated (or correlated) with Kukdo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukdo Chemical has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and Kukdo Chemical go up and down completely randomly.
Pair Corralation between Shinhan Inverse and Kukdo Chemical
Assuming the 90 days trading horizon Shinhan Inverse WTI is expected to generate 0.96 times more return on investment than Kukdo Chemical. However, Shinhan Inverse WTI is 1.04 times less risky than Kukdo Chemical. It trades about -0.05 of its potential returns per unit of risk. Kukdo Chemical Co is currently generating about -0.22 per unit of risk. If you would invest 286,000 in Shinhan Inverse WTI on August 31, 2024 and sell it today you would lose (6,000) from holding Shinhan Inverse WTI or give up 2.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Inverse WTI vs. Kukdo Chemical Co
Performance |
| Timeline |
| Shinhan Inverse WTI |
| Kukdo Chemical |
Shinhan Inverse and Kukdo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Inverse and Kukdo Chemical
The main advantage of trading using opposite Shinhan Inverse and Kukdo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Inverse position performs unexpectedly, Kukdo Chemical 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 Kukdo Chemical will offset losses from the drop in Kukdo Chemical's long position.| Shinhan Inverse vs. Seoyon Topmetal Co | Shinhan Inverse vs. Taeyang Metal Industrial | Shinhan Inverse vs. Youngsin Metal Industrial | Shinhan Inverse vs. Infinitt Healthcare Co |
| Kukdo Chemical vs. Kukdo Chemical | Kukdo Chemical vs. Korea Refract | Kukdo Chemical vs. Korea Refractories Co | Kukdo Chemical vs. Shinhan Inverse WTI |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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