Correlation Between Shinhan Inverse and ICD
Can any of the company-specific risk be diversified away by investing in both Shinhan Inverse and ICD 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 ICD 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 ICD Co, you can compare the effects of market volatilities on Shinhan Inverse and ICD 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 ICD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan Inverse and ICD.
Diversification Opportunities for Shinhan Inverse and ICD
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinhan and ICD is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan Inverse WTI and ICD Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICD Co 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 ICD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICD Co has no effect on the direction of Shinhan Inverse i.e., Shinhan Inverse and ICD go up and down completely randomly.
Pair Corralation between Shinhan Inverse and ICD
Assuming the 90 days trading horizon Shinhan Inverse WTI is expected to generate 0.67 times more return on investment than ICD. However, Shinhan Inverse WTI is 1.5 times less risky than ICD. It trades about 0.08 of its potential returns per unit of risk. ICD Co is currently generating about -0.28 per unit of risk. If you would invest 272,500 in Shinhan Inverse WTI on August 24, 2024 and sell it today you would earn a total of 7,000 from holding Shinhan Inverse WTI or generate 2.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinhan Inverse WTI vs. ICD Co
Performance |
| Timeline |
| Shinhan Inverse WTI |
| ICD Co |
Shinhan Inverse and ICD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan Inverse and ICD
The main advantage of trading using opposite Shinhan Inverse and ICD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan Inverse position performs unexpectedly, ICD 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 ICD will offset losses from the drop in ICD's long position.| Shinhan Inverse vs. Sam Yang Foods | Shinhan Inverse vs. Lion Chemtech Co | Shinhan Inverse vs. Intellian Technologies | Shinhan Inverse vs. FoodNamoo |
| ICD vs. Samsung Electronics Co | ICD vs. Samsung Electronics Co | ICD vs. LG Energy Solution | ICD 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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