Correlation Between Shinhan Inverse and SBI Investment
Can any of the company-specific risk be diversified away by investing in both Shinhan Inverse and SBI Investment 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 SBI Investment 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 SBI Investment KOREA, you can compare the effects of market volatilities on Shinhan Inverse and SBI Investment 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 SBI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Inverse and SBI Investment.
Diversification Opportunities for Shinhan Inverse and SBI Investment
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shinhan and SBI is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse WTI and SBI Investment KOREA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Investment KOREA 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 SBI Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Investment KOREA has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and SBI Investment go up and down completely randomly.
Pair Corralation between Shinhan Inverse and SBI Investment
Assuming the 90 days trading horizon Shinhan Inverse WTI is expected to generate 0.83 times more return on investment than SBI Investment. However, Shinhan Inverse WTI is 1.21 times less risky than SBI Investment. It trades about 0.03 of its potential returns per unit of risk. SBI Investment KOREA is currently generating about 0.0 per unit of risk. If you would invest 272,000 in Shinhan Inverse WTI on September 3, 2024 and sell it today you would earn a total of 6,500 from holding Shinhan Inverse WTI or generate 2.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.31% |
| Values | Daily Returns |
Shinhan Inverse WTI vs. SBI Investment KOREA
Performance |
| Timeline |
| Shinhan Inverse WTI |
| SBI Investment KOREA |
Shinhan Inverse and SBI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Inverse and SBI Investment
The main advantage of trading using opposite Shinhan Inverse and SBI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Inverse position performs unexpectedly, SBI Investment 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 SBI Investment will offset losses from the drop in SBI Investment's long position.| Shinhan Inverse vs. Kukdo Chemical Co | Shinhan Inverse vs. Korea Petro Chemical | Shinhan Inverse vs. LG Chemicals | Shinhan Inverse vs. Daehan Synthetic Fiber |
| SBI Investment vs. Dongjin Semichem Co | SBI Investment vs. AhnLab Inc | SBI Investment vs. Posco ICT | SBI Investment vs. CJ ENM |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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